Elawyers Elawyers
Washington| Change

United States v. Stewart, 03-4775 (2005)

Court: Court of Appeals for the Fourth Circuit Number: 03-4775 Visitors: 41
Filed: Apr. 14, 2005
Latest Update: Mar. 28, 2017
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 03-4775 UNITED STATES OF AMERICA, Plaintiff - Appellee, versus TERRY W. STEWART, Defendant - Appellant. Appeal from the United States District Court for the Western District of North Carolina, at Bryson City. Lacy H. Thornburg, District Judge. (CR-01-11) Argued: February 2, 2005 Decided: April 14, 2005 Before LUTTIG, WILLIAMS, and GREGORY, Circuit Judges. Affirmed in part, vacated in part, and remanded by unpublished per curia
More
                             UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT


                             No. 03-4775



UNITED STATES OF AMERICA,

                                              Plaintiff - Appellee,

           versus

TERRY W. STEWART,

                                             Defendant - Appellant.


Appeal from the United States District Court for the Western
District of North Carolina, at Bryson City. Lacy H. Thornburg,
District Judge. (CR-01-11)


Argued:   February 2, 2005                 Decided:   April 14, 2005


Before LUTTIG, WILLIAMS, and GREGORY, Circuit Judges.


Affirmed in part, vacated in part, and remanded by unpublished per
curiam opinion.


ARGUED: Camille Michel Davidson, THE FULLER LAW FIRM, P.C.,
Charlotte, North Carolina, for Appellant.        Matthew Theodore
Martens, Assistant United States Attorney, OFFICE OF THE UNITED
STATES ATTORNEY, Charlotte, North Carolina, for Appellee.       ON
BRIEF: Gretchen C. F. Shappert, United States Attorney, Charlotte,
North Carolina, for Appellee.


Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:

      On May 31, 2001, a grand jury returned a second superseding

indictment charging Appellant Terry W. Stewart (“Stewart”), with 37

counts of conspiracy, mail fraud, wire fraud, and money laundering.

After a trial in November 2001, in which Stewart appeared pro se,

a jury convicted Stewart on 24 of the 37 counts.                      The district

court thereafter sentenced him to 2,100 months (175 years) of

imprisonment.     Stewart appeals his conviction and sentence.                      We

affirm Stewart’s conviction.            However, consistent with United

States v. Hughes, No. 03-4172, 
2005 WL 628224
, (4th Cir. March 16,

2005), our recently published opinion giving guidance on the

application of United States v. Booker, 
125 S. Ct. 738
 (2005), we

find plain error in sentencing, exercise our discretion to notice

the error, vacate the sentence, and remand to the district court

for resentencing.



                                        I.
                                                     1
      This case involves a “Ponzi” scheme                devised and carried out

by   Phillip   Vaughan   (“Vaughan”),        Phillip      Greer    (“Greer”)       and,

Stewart.   The   premise     of   the   scheme      was    the    marketing    of    an

investment     opportunity    involving      what    was    represented       to    the


      1
      A Ponzi scheme is essentially “a phony investment plan in
which monies paid by later investors are used to pay artificially
high returns to the initial investors,” rather than made from the
success of a legitimate business venture. United States v. Godwin,
272 F.3d 659
, 666 (4th Cir. 2001) (citation omitted).

                                        2
victims as a secret method of trading options and futures in a

“risk free” manner that produced consistently large returns and

allowed the investment to grow tax free through the use of trusts.

These representations were false.

     In 1995, Vaughan formed a company named Banyan International

Ltd. (“Banyan”) to solicit investments from individuals. From 1996

through   March   2000,   Banyan   salesmen   sold   “note   receivables”

offering high fixed rates of return to unsophisticated individuals.

Proceeds from new investors were used to make lulling payments to

prior investors, and to pay money to Banyan insiders, allegedly

including Stewart.    Banyan owed over 500 investors more than $89

million when the scheme was uncovered.          Only $4.4 million was

seized from Banyan brokerage accounts.2

     In 1994, Stewart and his wife, Jeni, began selling private

trusts as independent contractors for Commonwealth Trust Company

(“Commonwealth”), a California-based company.3        In the latter part


     2
      The total amount of principal investment was $56 million, but
the amount that the investors thought that their investments had
earned when the scheme was uncovered amounted to over $89 million.
At Stewart’s sentencing, the district court found that Banyan was
responsible for laundering approximately $114 million in funds.
     3
      Stewart, a decorated Marine Corps veteran, retired from the
military in 1991 and thereafter states that he “began to learn
things that he did not like about the government that he had served
for twenty-six years. He began to study tax issues and learned how
wealthy individuals used asset protection devices to protect their
assets from taxation and seizure.” Appellant’s Br. at 21. “As
Stewart gained knowledge about asset protection, he wanted to share
this information with others,” id., which is why he began working
with Commonwealth.

                                    3
of 1996, Stewart met Vaughan and began a business relationship.

Stewart, who was not an employee or officer of Banyan, claims that

the relationship consisted of mutual referrals.              However, the

Government maintains that a key component of the marketing of the

“note receivables” in the Ponzi scheme was the representation that

the earnings on the investments were non-taxable.          In this regard,

Banyan’s investors were told that to render their investment non-

taxable, they needed to purchase a “pure trust organization,”

(“PTO”) and were directed to Commonwealth to make the purchase.4

Commonwealth sold three products to Banyan investors: (1) PTOs, (2)

Internationally Business Corporations (“IBCs”), and (3) “Private

Company Trusts” (“PCTs”).

     Stewart   offered   his   services   at   seminars    throughout   the

country.    At these seminars, he advised people how to transfer

ownership of personal and business assets into one or more PTOs,

IBCs, or PCTs and then issue fabricated liens against the same

property to create the appearance that the property had no net

value.5    At some of these seminars, Banyan salesmen spoke, and

Stewart promoted the Banyan investment vehicles.          Stewart, through


     4
      Stewart admits that Banyan literature endorsed Stewart and
Commonwealth but argues that many of Banyan’s investors were not
clients of his and purchased their PTOs elsewhere.
     5
      During these seminars, Stewart stated that “he hadn’t paid
taxes in years” because “it’s no longer legal to be taxed.” J.A.
745.   Stewart also stated that because the PTOs were a private
contract between private individuals, they were protected by common
law and not subject to statutory laws. Id. at 1058-60; 1159.

                                   4
Commonwealth, paid Banyan a $200 referral for people it referred to

Stewart.

     Stewart charged $2,525 for the purchase of a PTO, which

included trust documents from Maricopa County, Arizona and minutes

of   trustees   meetings    appointing     the   purchaser    as   “managing

director” of the trust.         The package also included a “trust

identification number” to be used in place of a tax identification

number.    The “trust identification numbers” used the same state

prefix and number of digits as tax identification numbers, but were

not legitimate.

     Vaughan, Greer, and the other co-defendants all pled guilty.

Stewart was the only one to proceed to trial.            This appeal from

Stewart’s conviction and sentence follows.



                                    II.

      First,    Stewart    argues   that   he    did   not   knowingly   and

intelligently waive his right to counsel.          In the alternative, he

argues that the district court judge should have appointed standby

counsel given the complexities of his criminal trial.              We reject

these arguments.




                                     5
                                      A.

      Determination of a waiver of the right to counsel is a

question of law, and we review it de novo.              United States v.

Singleton, 
107 F.3d 1091
, 1097 n.3 (4th Cir. 1997).               The Supreme

Court has held that under the Sixth Amendment a criminal defendant

must be afforded the right to counsel, including court-appointed

counsel   if   the   defendant   is   financially   unable   to    retain   an

attorney to defend himself.       Gideon v. Wainwright, 
372 U.S. 335
,

341 (1963).      But the Supreme Court has also made clear that

“although courts are commanded to protect the right to counsel

zealously, the defendant can waive the right if the waiver is

knowing, intelligent, and voluntary.”        Singleton, 107 F.3d at 1095

(citing Brady v. United States, 
397 U.S. 742
 (1970); Johnson v.

Zerbst, 
304 U.S. 458
 (1938)).

     Courts must take care not to force counsel upon a defendant,

because in addition to the right to the assistance of counsel, the

Sixth Amendment implicitly provides an affirmative right to self-

representation.      Faretta v. California, 
422 U.S. 806
, 807 (1975).

To preserve both the right to counsel and the right to self-

representation, “a trial court must proceed with care in evaluating

a defendant’s expressed desire to forgo representation and conduct

his own defense.”     Singleton, 107 F.3d at 1096.       Indeed,

     [a] trial court evaluating a defendant’s request to
     represent himself must “transverse . . . a thin line”
     between improperly allowing the defendant to proceed pro
     se, thereby violating his right to counsel, and

                                      6
       improperly having the defendant proceed with counsel,
       thereby violating his right to self-representation. A
       skillful defendant could manipulate this dilemma to
       create reversible error.

Fields v. Murray, 
49 F.3d 1024
, 1029 (4th Cir. 1995) (en banc)

(citations omitted).

       “The determination of whether there has been an intelligent

waiver of the right to counsel must depend, in each case, upon the

particular facts and circumstances surrounding that case, including

the background, experience, and conduct of the accused.”                Johnson,

304 U.S. at 464.       “[W]hether there is a proper waiver should be

clearly determined by the trial court, and it would be fitting and

appropriate for that determination to appear upon the record.” Id.

at 465.      Thus, “we review the sufficiency of a waiver of the right

to counsel by evaluating the complete profile of the defendant and

the circumstances of his decision as known to the trial court at

the time.”      Singleton, 107 F.3d at 1097.

       We have rejected the proposition that the failure of the trial

court to conduct a searching or formal inquiry into the defendant’s

understanding of his situation and his awareness of the dangers of

self-representation is error.           Id. at 1097-98.    Rather, “the trial

judge is merely required to determine the sufficiency of the waiver

from   the    record   as   a   whole   rather    than   from   a   formalistic,

deliberate, and searching inquiry.”              Id. at 1098 (quoting United

States v. Gallop, 
838 F.2d 105
, 110 (4th Cir. 1988)).



                                         7
                                B.

     Stewart’s lack of counsel was discussed at several pre-trial

proceedings, including five separate status of counsel hearings.

First, at Stewart’s initial appearance before the magistrate judge,

the judge went through the second superseding indictment, after

giving Stewart an opportunity to read it, and asked Stewart if he

understood each of the charges against him. J.A. 104-125. Stewart

affirmatively stated that he understood each charge.      Id.   The

judge also went through the maximum penalties for each of the

charges and Stewart stated that he understood each penalty.     Id.

The judge then informed Stewart of his right to counsel, appointed

or retained, and Stewart stated that his wife was in the process of

interviewing attorneys to retain.    Id. at 126.

     Next, at Stewart’s detention hearing, the magistrate judge

asked Stewart about the status of his counsel and Stewart stated

that he was in the process of interviewing a particular attorney

but had not retained him.   Id. at 134.   The magistrate judge then

asked if Stewart wanted to post pone the hearing so that he could

have counsel present, but Stewart declined and signed a waiver of

counsel form for the purpose of the detention hearing only.6    Id.



     6
      At the conclusion of the hearing, the magistrate judge set a
$500,000 unsecured bond for Stewart. J.A. 169. The district court
thereafter revoked Stewart’s bond and detained him, finding him to
be a flight risk. Id. at 215. We affirmed the district court’s
ruling.   United States v. Stewart, 19 Fed. Appx. 46 (4th Cir.
2001).

                                 8
at 134-35. At the detention hearing before the district court, the

district court judge advised Stewart of his right to counsel and

asked if he would like counsel appointed for him, but Stewart again

declined.     Id. at 214-15.

     At Stewart’s status of counsel hearing on July 9, 2001,

Stewart told the magistrate judge that he was arranging to retain

counsel.    Id. at 221-22.     After the magistrate judge stated to

Stewart that his best chance of getting an acquittal would be to

retain counsel, Stewart stated that he understood.      The magistrate

judge then stated to Stewart:

     Well, we need to get something done pretty soon. And you
     need to understand that probably Judge Thornburg does not
     have to wait until you’ve got a lawyer, and he will wait
     a reasonable period of time for you to get a lawyer. But
     if you don’t have a lawyer within a certain period of
     time, he will not allow the fact that you don’t have a
     lawyer deter the trial at some point from going on. Do
     you understand?

Id. at 226.    Stewart stated that he did understand.    Id.

     At the second status of counsel hearing on August 7, 2001, the

magistrate judge suggested that the court could appoint an attorney

until Stewart was able to find the funds to retain an attorney.

Id. at 231.    The magistrate judge stated:   “I worry about you, Mr.

Stewart.    A lot of these other folks have got lawyers, and they’re

talking to the government.” Id. The magistrate judge told Stewart

again that “[b]ut what’s going to happen is it’s going to come up

against the trial date and you’re going to go I’m still trying to

get a lawyer and I need to postpone it, and they’re going to go

                                   9
that’s too bad. . . .    Do you understand what I’m saying.”   Id. at

232.    Stewart responded: “Well, sir, I feel in some ways that I’m

being constructively denied the counsel of my choice. . . .        I

couldn’t make any arrangements to go up and see the attorney . . .

.”   Id.   Stewart told the magistrate judge that he would “like to

work a little harder on trying to work things out with [an attorney

in Indianapolis] at this point.”       Id. at 233.

       At the third status of counsel hearing on August 13, 2001,

Stewart stated that he was still working on getting an attorney and

the magistrate judge stated:

       But I’m saying to you, you need somebody to help carry
       the ball for you in this. I don’t want you to be left
       with - you know, in a weakened position because you have
       chosen not to accept court-appointed counsel and your own
       futile effort to get your own counsel resulting in you
       winding up representing yourself in a disastrous court
       trial. And it happens sometimes, and people lose those
       things and they want to go up and they say, well, I
       didn’t have an attorney of my choice. And if the court
       has done everything to give you a competent attorney, the
       reason you don’t have an attorney of your choice is you
       refused the court-appointed counsel and couldn’t hire
       your own, that doesn’t get you the win down the road with
       the court of appeals.      In other words, we’re doing
       everything we can to give you a lawyer.

Id. at 245-56.    At the fourth status of counsel hearing on August

15, 2001, the magistrate judge asked Stewart again if he wanted a

court-appointed attorney and he stated, “I would like to continue

pro se, sir.”    Id. at 253-b.   The magistrate judge cautioned: “I

really think this is a bad mistake to represent yourself like this.

It never works over in federal court. . . . You’ve got to try to


                                  10
protect yourself with regard to this case and be vocal in court and

try your case.”        Id. at 253-e.

      At   the      fifth,   and   final,      status   of    counsel    hearing       on

September 13, 2001, the magistrate judge summarized the court’s

efforts to provide Stewart with counsel and noted that “in spite of

the numerous requests by the Court . . . you have chosen not to ask

for a court-appointed attorney.” Id. at 255. The magistrate judge

then told Stewart that the district court judge, Judge Thornburg,

had   ruled    that    if    Stewart    did    not   request   a    court-appointed

attorney by September 21, he would have to proceed pro se or retain

counsel, but that the trial date in November 2001 would not be

delayed.      Id.     Stewart responded that he understood.                   Id.   At a

calendar call on November 5, 2001, Stewart made a oral motion for

a continuance based on lack of preparation time, but, having

already continued the trial once, Judge Thornburg denied that

motion.    Id. at 298.



                                          C.

      In Singleton, we set out the proper analysis for determining

if a waiver of counsel was knowing and intelligent.                      107 F.3d at

1098-99.      As noted, a formal inquiry is not required, rather, an

“open court exploration of the defendant’s background capabilities

and   understanding         of   the   dangers    and   disadvantages         of    self-

representation,”        is   all   that   is     necessary.        Id.   at    1097-98.


                                          11
Relevant    factors   include    the   defendant’s    appreciation       of   the

charges and potential penalties, the defendant’s understanding of

the judicial process, and the defendant’s educational background.

Id. at 1098.

       Looking first to the nature of the charges and the potential

penalty, Stewart was informed of these at his arraignment.                     As

detailed, the magistrate judge went through each charge and its

potential penalty, and Stewart responded that he understood each

one.    The magistrate judge also, on numerous occasions, expressed

to Stewart that this was a complex fraud case that carried the

potential for a long sentence.              Stewart also responded that he

understood this.         Thus, Stewart was adequately informed of the

charges against him and their penalties.

       Next,   looking    to   Stewart’s     appreciation   of    the   judicial

process. Stewart proceeded pro se in several pre-trial hearings on

various motions as well as at his status of counsel hearings.                  In

these motion hearings, Stewart observed the Government’s attorney

make   arguments   and     conduct   direct    examinations      of   witnesses.

Stewart also conducted cross-examinations of witnesses at these

hearings.      In addition, throughout the hearings, the magistrate

judge reminded Stewart of the Federal Rules of Evidence and Federal

Rules of Criminal Procedure that must be followed. Indeed, Stewart

participated in the judicial process for nearly sixth months before

trial.


                                       12
      Finally, with regard to Stewart’s intelligence and education,

the   magistrate   judge   and   the    district   court   each   had   ample

opportunity to observe Stewart throughout the pretrial hearings.

They each questioned him intensively about his decision to proceed

pro se.   Stewart also had an impressive education and career in the

military.7   In addition, Stewart was well-spoken, respectful, and

even well-versed in various aspects of the law during his pretrial

hearings, demonstrating his competency and composure.

      The complex nature of this fraud case as well as the large

nature of the penalties it carried highlight how unfortunate

Stewart’s decision to proceed pro se really was in this case.

However, it is hard to imagine what else the magistrate judge and

district court could have done to convince Stewart to proceed with

counsel, short of forcing counsel upon him, which would undoubtedly

violate his right to self-representation.          A review of the record

as a whole is replete with evidence that Stewart’s decision to

forego counsel and proceed pro se was knowing, intelligent, and

voluntary.   Under such circumstances, his waiver was effective.




      7
      While in the military, he was awarded two Purple Hearts, a
Bronze Star combat “V” for Valor, the Navy Commendation Medal, the
Vietnam Cross of Gallantry with Bronze Star, a National Defense
Medal, a Vietnam Service Medal, a Vietnam Campaign Medal with 9
clusters, the Presidential Unit Award, the Navy Unit Award, and the
Marine Corps Unit Award.

                                       13
                                       D.

      Because Stewart did not request standby counsel or object to

the court’s failure to appoint standby counsel on its own, we must

review the trial court’s decision not to appoint standby counsel

for plain error.        Plain error requires that the party seeking

appellate review demonstrate that: there is an error, the error is

plain,   the   error    affects     substantial   rights,     and   the    error

seriously affects the fairness, integrity or public reputation of

judicial proceedings. Olano, 507 U.S. at 732-37. However, because

no   error   occurred   in   this    case,   Stewart   does   not   meet    this

standard.

      No court has held that the Constitution requires it to appoint

standby counsel.    We have held that “[a]lthough a court may, in its

discretion, allow attorney participation [as standby counsel], the

Constitution does not mandate it.”           Singleton, 107 F.3d at 1097

n.2, 1100; see United States v. Lawrence, 
161 F.3d 250
, 253 (4th

Cir. 1998) (“The Sixth Amendment does not require a court to grant

advisory counsel to a criminal defendant who chooses to exercise

his right to self-representation by proceeding pro se.”).             While a

defendant may certainly be required to accept the assistance of

standby counsel over objection, a district court is not required to

offer standby counsel, particularly where, as here, no such request

is made.




                                       14
                                   III.

       Stewart also raises a number of other objections to his

conviction.    We address each in turn, but find them all without

merit.



                                    A.

       Stewart argues that the evidence was insufficient to support

the finding that he possessed the requisite intent to defraud.

Stewart did not move for a Fed. R. Crim. P. 29 judgment of

acquittal based on the insufficiency of the evidence.            While we

have never considered the question of whether a defendant who fails

to move for a Rule 29 motion based on insufficiency of the evidence

may raise that issue on appeal, the Sixth and Ninth Circuits have

each held that a defendant may not.        See United States v. Carr, 
5 F.3d 986
, 991 (6th Cir. 1992) (noting that because defendant failed

to make insufficiency arguments to judge either at the close of

government’s case or after the close of the evidence as a whole,

defendant failed to preserve issues for appellate review); United

States v. Ward, 
914 F.2d 1340
, 1346 (9th Cir. 1990) (stating that

appellant waived right to challenge the sufficiency of the evidence

on appeal by failing to move for a Rule 29 motion during trial on

that   ground);   2A   Charles   Alan    Wright,   Federal   Practice   and

Procedure § 469 (3d ed. 2000) (referring to the “seemingly well-

settled doctrine that if no motion for judgment of acquittal was


                                    15
made in the trial court, an appellate court cannot review the

sufficiency   of   the   evidence.    And    if   the   defendant   asserted

specific grounds in the trial court as the basis for a motion for

acquittal, he or she cannot assert other grounds on appeal.”).

Here, Stewart did make a motion styled a Rule 29 judgment of

acquittal, but it was based on grounds of alleged prosecutorial

misconduct.   Supp. J.A. 1.    The district court denied that motion,

stating that Stewart “makes no argument in his motion concerning

the sufficiency of the evidence.”         Id. at 12.

     Stewart’s failure to move for a Rule 29 motion based on the

sufficiency of the evidence precludes our review.           As one purpose

of a Rule 29 motion is to allow the trial court the opportunity to

grant a defendant acquittal when the evidence is insufficient to

sustain a conviction, it only works efficiently when the trial

court has such an opportunity.       However, even if we were to take

the first opportunity to review the sufficiency of the evidence

here, the evidence, when taken in the light most favorable to the

Government, was such that a reasonable trier of fact could have




                                     16
found Stewart guilty beyond a reasonable doubt.8        United States v.

Tresvant, 
677 F.2d 1018
, 1021 (4th Cir. 1982).



                                  B.

     During trial, Stewart subpoenaed Vaughan, a co-defendant who

had previously pled guilty, as a potential witness to testify in

his defense. Vaughan, through counsel, moved to quash the subpoena

on the ground that he would invoke his Fifth Amendment right not to

incriminate himself if called to testify.      The district court thus

quashed the subpoena. Stewart argues that the district court erred

in   quashing   the   subpoena   because    Vaughan’s   plea   agreement

specifically stated that he was waiving his right not to be

compelled to incriminate himself.          J.A. 1292.    Alternatively,

Stewart argues that he should have been permitted to introduce

Vaughan’s hearsay statements into evidence.

     In Mitchell v. United States, 
526 U.S. 314
 (1999), the Supreme

Court held that a defendant who waives his Fifth Amendment right to

remain silent by pleading guilty does not thereby waive his right


     8
      With regard to Stewart’s intent to defraud, testimony was
presented that Stewart informed investors that attorneys and CPAs
would conclude that the tax benefits he stated that the PTOs
offered were not available but that he believed that the tax
benefits were available.     J.A. 359-60; 601, 1161.      However,
testimony was also presented that Stewart received and ignored
warnings from outside attorneys and CPAs regarding the lack of
legitimacy of his tax advice.     Id. at 890-901; 1056-70; 1152.
Based on these warnings, it was a reasonable for the jury to infer
that Stewart understood that his belief about the tax benefits of
the PTOs was unfounded.

                                  17
to remain silent at his sentencing.            See id. at 326 (“Although a

witness has pleaded guilty to a crime charged but has not been

sentenced, his constitutional privilege remains unimpaired.”). The

Court expressly noted that “a defendant who awaits sentencing after

having pleaded guilty may assert the privilege against self-

incrimination if called as a witness in the trial of a co-

defendant, in part because of the danger of responding to questions

that might have an adverse impact on his sentence or on his

prosecution for other crimes.”              Id. at 327 (internal quotation

marks omitted).      Thus, the mere fact that Vaughan had pled guilty

did not mean that he no longer possessed a valid fear of further

incriminating himself and the district court correctly quashed the

subpoena.

     Stewart’s alternative argument that he should be allowed to

introduce      Vaughan’s     hearsay   statements      under       Chambers   v.

Mississippi, 
410 U.S. 284
 (1973) is also without merit.                       In

Chambers, the Supreme Court held that, in certain “circumstances,

where constitutional rights directly affecting the ascertainment of

guilt   are    implicated,     the   hearsay    rule   may   not    be   applied

mechanistically to defeat the ends of justice.”              Id. at 302.      At

issue in Chambers was the exclusion of certain statements by a non-

defendant who had repeatedly admitted to friends and colleagues

that he had committed the murder for which the defendant was

charged.      Id. at 292-93.    These statements were excluded at trial


                                       18
as hearsay.     Id. at 299.     The Court reversed, finding that because

the hearsay statements were “critical evidence” for the defense and

the circumstances under which the statements were made “provided

considerable    assurance     of    their    reliability,”      their   exclusion

violated due process.       Id. at 300-02.         We have since held that the

rule of Chambers is limited to third-party confessions.                    United

States v. Young, 
248 F.3d 260
, 271 (4th Cir. 2001); see Huffington

v. Nuth, 
140 F.3d 572
, 584 (4th Cir. 1998) (applying Chambers only

to “exculpatory confessions by third parties”).

     Because Stewart did not argue to the district court that the

hearsay rules were unconstitutional as applied under Chambers, we

review   the   decision   for      plain    error.     See   United     States   v.

Dukagjini, 
326 F.3d 45
, 59 (2d Cir. 2003) (applying plain error

review   when     appellants       failed     to     preserve     objection      to

Confrontation Clause violation).            In his brief, Stewart fails to

identify the specific hearsay statements that he contends were

improperly excluded under Chambers, how any such statements qualify

as “third party confessions,” how such statements were “critical”

to his case, or how they were given under circumstances giving

“considerable assurance of their reliability.”               Under these facts,

it was not error for the district court to exclude Vaughan’s

statements as hearsay.




                                       19
                                     C.

      Stewart next challenges the introduction at trial of evidence

that, he contends, was obtained during an unlawful search of a

“blue shed” located near his residence.9 He contends that the

search of the blue shed was unlawful because the warrant only

allowed for the search of his residence, which does not include the

outbuildings, and that the blue shed was located on an adjoining,

but separate, piece of land.       We review the scope of the warrant de

novo.     United States v. Oloyede, 
982 F.2d 133
, 138 (4th Cir. 1992).

      Here, the warrant authorized the search of the “premises” at

765   Grinder    Creek   Road,    which    was   identified    as     the   brown

“residence and place of business” of Stewart.                  J.A. 1448.       A

warrant authorizing the search of certain “premises” implicitly

includes     authorization   to   search    outbuildings      found    on   those

premises.     See, e.g., United States v. Pennington, 
287 F.3d 739
,

744 (8th Cir. 2002); United States v. Cannon, 
264 F.3d 875
, 880

(9th Cir. 2001).     An affidavit in support of the warrant also may

be used to explain an ambiguity in the scope of the warrant.

United States v. Wuagneux, 
683 F.2d 1343
, 1350, n.6 (11th Cir.

1982).     The affidavit in this case, submitted in support of the

warrant by a financial advisor for the Internal Revenue Service,

stated that the scope of the warrant included “any outbuildings and



      9
      Stewart fails, however, to point to any evidence actually
introduced at trial that was seized from the blue shed.

                                     20
appurtenances thereto.” J.A. 1451. Thus, Stewart’s claim that the

agents exceeded the scope of the warrant fails.

     During   trial,   Judge   Thornburg    rejected   Stewart’s   second

contention, that the blue shed was not located on the land covered

by the search warrant.   Id. at 1013.      We review factual findings on

a motion to suppress for clear error.         United States v. Jarrett,

338 F.3d 339
, 343-44 (4th Cir. 2003).       Here, an IRS agent testified

at the suppression hearing that he reviewed the county maps at the

time of the search and determined that the blue shed was on the

parcel of land covered by the warrant.        J.A. 718, 728.   Given this

testimony, it was not clear error for the district court to find

that Stewart had not shown that the shed was on the other parcel of

land.10



                                   D.

     Stewart also argues that his rights were violated under Brady

v. Maryland, 
373 U.S. 83
 (1963), because certain bates-stamped

documents were missing from boxes that the Government gave him

access to for discovery.         To establish a Brady violation, a

defendant   must   demonstrate   that   (1)   the   prosecutor   withheld



     10
      In addition, even if the shed was on another parcel, any
error would not implicate the exclusionary rule because suppression
is not required when agents executing a search warrant make an
objectively reasonable mistake as to the boundaries of the property
that they are authorized to search.         See United States v.
Patterson, 
278 F.3d 315
, 318 (4th Cir. 2002).

                                   21
evidence that was favorable to the defendant, either directly or

with impeachment value, (2) the prosecutor suppressed the evidence,

either willfully or inadvertently, and (3) the evidence must be

material.       United States v. Vinyard, 
266 F.3d 320
, 331 (4th Cir.

2001).       Because Stewart did not raise this issue below, we review

it for plain error.          Id. at 324.

       Stewart contends that when he looked at the documents that the

Government gave him access to, he noticed that several documents

were missing from the sequentially numbered documents.                         However,

Stewart       stated    to   the    court    that      he   had     only   looked    at

“approximately 40 percent of” the documents supplied to him.                        J.A.

295.        He also stated, “I’m not going to go through hundreds of

thousands       of    documents    hoping        I’m   going   to    stumble    across

something.”      Id. at 261.       Given that Stewart did not review all the

documents      that    the   Government      turned     over   to   him,   he   cannot

establish the first element of Brady, that the Government withheld

evidence (much less evidence that was exculpatory or impeaching)

from him.11




       11
      Stewart also argues that a witness for the Government
testified that the witness had been given some information that was
favorable to Stewart, but that this information was not turned over
to him. Again, without a review of all the documents turned over
to him, Stewart cannot establish a violation.

                                            22
                                E.

     Stewart argues that he was not afforded the opportunity to

testify on his own behalf because he was not advised of this right.

A defendant in a criminal trial has a constitutional right to

testify on his own behalf.    Rock v. Arkansas, 
483 U.S. 44
, 51

(1987).   However, we have held that a district court is not

required to advise the defendant of his right to testify or obtain

an on-the-record waiver of that right.   United States v. McMeans,

927 F.2d 162
, 163 (4th Cir. 1991); see Sexton v. French, 
163 F.3d 874
, 881 (4th Cir. 1988) (“[T]he trial court does not have a sua

sponte duty to conduct a colloquy with the defendant at trial to

determine whether the defendant has knowingly and intelligently

waived the right to testify.”). Rather, “[t]o waive the right, all

the defendant needs to know is that a right to testify exists.”

McMeans, 927 F.2d at 163.    Because Stewart failed to raise this

issue below, we review it for plain error.   Olano, 507 U.S. at 730.

     Here, the record reflects that the district court explicitly

informed Stewart of his right to testify.    J.A. 934, 1014.   Then,

after the close of the Government’s evidence, Stewart stated that

he would have only one witness, Vaughan.       Id. at 1268.    After

Vaughan invoked his Fifth Amendment privilege, the court asked if

Stewart had any further evidence and Stewart responded, “No, sir.”

Id. at 1307.   Having been advised by the district court of his




                                23
right to testify, Stewart’s failure to testify is a waiver of that

right and his claim thus fails.12



                                        F.

     Stewart argues that the district court erred in failing to

give the jury a “reliance on expert” instruction on the issue of

intent    to   defraud   because   he   contends   that   the   IRS   provided

erroneous information to him.           Because Stewart did not object to

the instructions of the district court or request the reliance on

expert instruction, we review his claim for plain error.                United

States v. Stitt, 
250 F.3d 878
, 883 (4th Cir. 2001).

     The jury instructions contained an extensive discussion of the

intent to defraud.       The instructions specifically advised the jury

that “the good faith of a defendant is a complete defense to the

charge of wire fraud.”        J.A. 1387.      They also stated that “[a]

person who acts . . . on a belief or an opinion honestly held is

not punishable . . . merely because the belief, [or] opinion turns

out to be inaccurate, incorrect, or wrong.            A honest mistake in

judgment or an error in management does not rise to the level of



     12
      Indeed, Stewart cannot claim that he was confused that the
district court judge’s question to him about having further
evidence meant that it was his time to testify.      In Stewart’s
earlier detention hearing, the magistrate judge asked Stewart,
“[D]o you want to put on any evidence today?”. J.A. 149. Stewart
then stated that he “would like to do a presentation,” and was
thereafter afforded the opportunity to testify on his own behalf.
Id. at 149-50.

                                        24
intent to defraud.”   Id.   Given that these instructions accurately

stated the law with regard to an intent to defraud and expressly

advised the jury that good faith was a defense and that a honestly

held belief does not equate to an intent to defraud, the district

court did not err in failing to give a further “reliance on expert”

instruction.



                                 IV.

     Finally, Stewart presents challenges to the application of

various guideline enhancements to his sentence as well as a Sixth

Amendment challenge under Booker. The jury found Stewart guilty on

counts of conspiracy, wire fraud, mail fraud, conspiracy to commit

money laundering, and money laundering. At sentencing the district

court grouped all counts together pursuant to U.S. Sentencing

Guideline Manual § 3D1.2(d) and used the offense level for the

money laundering counts as the offense level for the group.      It

calculated Stewart’s sentence as follows:

Base level offense for money laundering, § 2S1.1:         23

Enhancement for loss greater than $100,000,000,
§ 2S1.1(b)(2):                                           +13

Enhancement for vulnerable victims, § 3A1.1(b)(1):        +2

Enhancement for large number of vulnerable victims,
§ 3A1.1(b)(2):                                            +2

Enhancement for being an organizer or leader,
§ 3B1.1(a):                                               +4



                                  25
Enhancement for abuse of position of trust,
§ 3B1.3:                                                  +2


                                                          ==

Final Offense Level:13                                    46

The enhancements to Stewart’s sentence were based on facts found by

the district court, not the jury.     With these enhancements, the

district court sentenced Stewart to 2100 months, running his

sentences consecutively under U.S. Sentencing Guideline Manual §

5G1.2(d).

     As Stewart has raised his Booker objection for the first time

on appeal, we review this issue under plain error analysis, which

our recent decision in Hughes governs.   Under Hughes, the district

court plainly erred in imposing a sentence on Stewart that exceeded

the maximum allowed under the guidelines based on the facts found

by the jury alone.14     Hughes, 
2005 WL 628224
, at *2.   Thus, we

vacate Stewart’s sentence and remand for resentencing “consistent

with the remedial scheme set forth in Justice Breyer’s opinion for

the Court in Booker.”    Id.




     13
      The district court calculated Stewart’s sentencing level at
46, but as the highest level on the Sentencing Guideline chart is
43, his offense level is treated as a 43.     See U.S. Sentencing
Guideline Manual, ch. 5, pt. A, cmt. n.2 (2000).
     14
      The Government conceded at oral argument that Stewart’s
sentence was enhanced on facts not found by the jury or admitted by
Stewart.

                                 26
                                V.

For the reasons set forth above, the judgment of the district court

is



                                                 AFFIRMED IN PART,
                                                  VACATED IN PART,
                                                     AND REMANDED.




                                27

Source:  CourtListener

Can't find what you're looking for?

Post a free question on our public forum.
Ask a Question
Search for lawyers by practice areas.
Find a Lawyer