Filed: Jun. 20, 2016
Latest Update: Mar. 02, 2020
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 14-1587 _ UNITED STATES OF AMERICA v. GORDON D. MCDONALD, Appellant _ On Appeal from the United States District Court for the District of New Jersey (D.C. Criminal No. 2:09-cr-00656-001) District Judge: Honorable Susan D. Wigenton _ Submitted under Third Circuit LAR 34.1(a) on October 29, 2015 Before: MCKEE, Chief Judge, SCIRICA and ROTH, Circuit Judges (Opinion filed: June 20, 2016) _ OPINION* _ ROTH, Circuit Judge * Th
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 14-1587 _ UNITED STATES OF AMERICA v. GORDON D. MCDONALD, Appellant _ On Appeal from the United States District Court for the District of New Jersey (D.C. Criminal No. 2:09-cr-00656-001) District Judge: Honorable Susan D. Wigenton _ Submitted under Third Circuit LAR 34.1(a) on October 29, 2015 Before: MCKEE, Chief Judge, SCIRICA and ROTH, Circuit Judges (Opinion filed: June 20, 2016) _ OPINION* _ ROTH, Circuit Judge * Thi..
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
No. 14-1587
________________
UNITED STATES OF AMERICA
v.
GORDON D. MCDONALD,
Appellant
________________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Criminal No. 2:09-cr-00656-001)
District Judge: Honorable Susan D. Wigenton
________________
Submitted under Third Circuit LAR 34.1(a)
on October 29, 2015
Before: MCKEE, Chief Judge, SCIRICA and ROTH, Circuit Judges
(Opinion filed: June 20, 2016)
________________
OPINION*
________________
ROTH, Circuit Judge
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
Gordon McDonald appeals his conviction and sentence for fraud and kickback
conspiracies,1 major fraud against the United States,2 conspiracy to launder money,3 bid
rigging,4 providing a kickback to a prime contractor,5 subscribing a false tax return,6 and
obstruction of justice.7 McDonald argues the District Court erred in (1) rejecting a
proposed jury instruction; (2) excluding evidence regarding a separate fraud scheme; (3)
overruling his objection to a comment by the government during closing; (4) excluding
evidence regarding McDonald’s physical health; and (5) calculating the improper benefit
for purposes of determining the Guidelines range. For the reasons that follow, we will
affirm the District Court’s judgment.
I.
Because we write for parties familiar with the facts, we set forth only a limited
background. McDonald was the project manager at two toxic waste cleanup sites,
Diamond Alkali and Federal Creosote, for which his employer, Sevenson Environmental
Services, served as general contractor. Tierra Solutions, the responsible party for the
pollution at Diamond Alkali, paid the cleanup costs at that site. At Federal Creosote,
because the responsible party was unable to pay, the U.S. Environmental Protection
Agency paid for the cleanup through the Superfund Program.
1
18 U.S.C. § 371.
2
18 U.S.C. § 1031(a).
3
18 U.S.C. § 1956(a)(2)(A).
4
15 U.S.C. § 1.
5
41 U.S.C. § 8702.
6
26 U.S.C. § 7206(1).
7
18 U.S.C. § 1512(c)(2).
2
McDonald and his co-conspirators manipulated the subcontractor bidding process
at the two sites so that favored bidders could win subcontracts at inflated prices, by
sharing “last looks” of rivals’ bids, providing inside information, and coordinating bids.
McDonald arranged for the three subcontractors to give him and other Sevenson
employees gifts—such as cash, tickets to events, electronics, dinners, and cruises—and to
pass the cost of the gifts on as legitimate costs to Tierra Solutions or the EPA.
McDonald also submitted tax returns in which he deducted various kickbacks as “outside
services” on the tax form for a shell company he owned and gave several false statements
to IRS special agents.
As relevant to this appeal, the government introduced evidence regarding two
schemes for which McDonald was not specifically charged. In a scheme referred to as
“disposal switch,” subcontractor Bennett Environmental removed over 20,000 tons of soil
for disposal and billed the federal government $498.50 per ton. However, Bennett
Environmental used a cheaper disposal method, for which the price was only $418.50 per
ton. No one notified the government of this “switch,” and Bennett Environmental
received a $2 million windfall. Informed of the scheme, McDonald received 25 percent
of the windfall by sending invoices through his shell company to Bennett Environmental
for services that the shell company did not perform. In another scheme known as
“fictitious invoices,” subcontractor JMJ Environmental, which provided waste water
treatment at both sites, submitted invoices to Sevenson for work JMJ Environmental did
not perform. Upon receiving payment from Sevenson, JMJ Environmental sent the
funds, at McDonald’s direction, to a flower shop owned by McDonald’s wife. McDonald
3
did not object to the admission of the evidence regarding these schemes, and instead
requested a jury instruction regarding the evidence. The District Court denied the
request.
A jury convicted McDonald and the District Court sentenced him to a total term of
imprisonment of 168 months. McDonald appeals.
II.8
A. Proposed Jury Instruction
McDonald argues the District Court erred in denying his proposed jury instruction,
which stated that, with regard to testimony on the “disposal switch” and “fictitious
invoices” schemes, “[t]he defendant is only on trial for the crimes charged in the
indictment” and “you may not conclude that the government should have charged
defendant with [the] uncharged crimes.” The District Court rejected McDonald’s
proposal and instead instructed: “[y]ou should consider only those goals or objects that I
will explain to you. Gordon McDonald is not on trial for any conduct, offenses[,] or
objectives not alleged in the indictment.” We review the District Court’s refusal to give a
requested jury instruction for abuse of discretion.9 “A court errs in refusing a requested
instruction only if the omitted instruction is correct, is not substantially covered by other
instructions, and is so important that its omission prejudiced the defendant.”10 Here,
8
The District Court had jurisdiction pursuant to 18 U.S.C. § 3231. We have jurisdiction
under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a).
9
United States v. Friedman, 658 F.3d 342, 352 (3d Cir. 2011).
10
United States v. Davis,
183 F.3d 231, 250 (3d Cir. 1999).
4
McDonald’s proposed instruction would have been substantially duplicative of the
District Court’s instruction. Therefore, the District Court did not abuse its discretion.
B. Indictment in the District Court for the Western District of
New York
McDonald argues the District Court erred in refusing to admit evidence of an
indictment before the United States District Court for the Western District of New York,
unrelated to this case except that it concerned Sevenson executives. Those executives
were neither defendants nor witnesses in this case. Nevertheless, McDonald maintains
the WDNY indictment, which alleged the use of fraudulent invoices in a tax evasion
scheme, would show his own acts were in furtherance of tax fraud rather than the
kickback and fraud conspiracies charged in this case. We review a district court’s
evidentiary rulings for abuse of discretion.11 McDonald does not challenge the District
Court’s analysis, under Federal Rule of Evidence 403, that the WDNY indictment had
little probative value and would confuse the jury. Rather, McDonald asserts three
grounds upon which the evidence should have been admitted: (1) as an admission by a
party opponent; (2) under the doctrine of judicial estoppel; and (3) as required for due
process under Brady v. Maryland.12 None is availing.
First, because the District Court did not exclude the WDNY indictment on hearsay
grounds, the hearsay exception for admission by a party opponent is irrelevant. Second,
because the WDNY indictment involved no factual overlap with McDonald’s case,
McDonald cannot point to an inconsistent legal or factual position as to trigger judicial
11
United States v. Serafini, 233 F.3d 758, 768 n.14 (3d Cir. 2000).
12
Brady v. Maryland, 373 U.S. 83, 87 (1963).
5
estoppel.13 Third, we review the Brady claim for plain error because it was not raised in
the District Court.14 We conclude there was no error, because McDonald has not
established any evidence from the WDNY indictment as favorable to him or bearing on
the credibility of any witness in his case.15 Therefore, the District Court did not err in
excluding the WDNY indictment.
C. Closing Argument
McDonald objects to the government’s characterization, in summation, that
McDonald’s “co-conspirators have come clean,” and argues the comment implied his
culpability and highlighted his decision not to testify, thereby prejudicing the outcome of
the trial. Because McDonald did not object until after his own closing argument, we
review for plain error.16 “Improper statements made during summation may warrant a
new trial when such statements cause the defendant substantial prejudice by so infecting
the trial with unfairness as to make the resulting conviction a denial of due process.”17
Here, the comment does not misstate the evidence or lead the jury to infer any
undisclosed facts that the prosecutor knew but that could not be admitted in evidence.18
According to the government, the comment was made to address why the co-
13
In re Chambers Dev. Co., 148 F.3d 214, 229 (3d Cir. 1998).
14
United States v. Olano,
507 U.S. 725, 731-32 (1993); United States v. Mota,
685 F.3d
644, 648 (7th Cir. 2012).
15
United States v. Booth,
309 F.3d 566, 574 (9th Cir. 2002); Strickler v. Greene,
527
U.S. 263, 282 (1999).
16
United States v. Brennan,
326 F.3d 176, 182 (3d Cir. 2003).
17
United States v. Brown,
765 F.3d 278, 296 (3d Cir. 2014) (internal quotation and
punctuation omitted).
18
See United States v. Mastrangelo,
172 F.3d 288, 297 (3d Cir. 1999); United States v.
Walker,
155 F.3d 180, 186 (3d Cir. 1998).
6
conspirators’ testimony was credible, in response to McDonald’s efforts to discredit the
testimony of the co-conspirators, who initially denied responsibility of wrongdoing and
later pled guilty. The comment is not improper.
Moreover, even if the comment was improper, “a criminal conviction is not to be
lightly overturned on the basis of a prosecutor’s comments standing alone, for the
statements or conduct must be viewed in context; only by so doing can it be determined
whether the prosecutor’s conduct affected the fairness of the trial.”19 Here, the District
Court instructed the jury that testimony regarding the cooperators’ guilty pleas was
“offered only to allow you to assess the credibility of the witness” and “[y]ou must not
consider . . . their guilty pleas . . . as any evidence of Gordon McDonald’s guilt.”20 The
District Court also instructed, “[w]hether or not their testimony may have been
influenced by the plea agreement or the [g]overnment’s promises is for you to
determine.”21 Further, the District Court instructed, “[y]ou must not attach any
significance to the fact that Gordon McDonald did not testify.”22 In light of these
instructions, we conclude the government’s conduct—even if it had been improper—did
not amount to plain error.
D. Evidence Regarding McDonald’s Physical Condition
McDonald maintains he suffered from loss of memory and eyesight, and argues
the District Court erred in (1) refusing to declare McDonald incompetent to stand trial,
19
United States v. Young, 470 U.S. 1, 11 (1985).
20
S.A. 1407.
21
Id.
22
Id. at 1410.
7
(2) excusing a juror for comments related to McDonald’s physical health, (3)
provisionally excluding evidence of his physical infirmities, and (4) instructing the jury
not to consider his physical condition. None of the challenges has merit.
First, we review the District Court’s finding of competency under the clearly
erroneous standard and conclude that there was no clear error.23 The District Court noted
that the court-appointed expert performed multiple tests that indicated that McDonald
was malingering. The District Court also noted that the defense’s expert merely
concluded that McDonald suffered from certain cognitive limitations, but that conclusion
failed to address whether McDonald was able to understand the nature and consequences
of the proceedings and assist properly in his defense.
Next, we review the District Court’s decision to excuse a sitting juror for abuse of
discretion.24 Where a district court takes steps to ascertain that the juror can serve fairly
and impartially, there is no abuse of discretion.25 The District Court interviewed the
juror, who stated, “I don’t know if I can find this guy guilty[,]” and answered
affirmatively to the question, “[t]he bottom line is you don’t believe you can be fair and
impartial . . . ?”26 Based on these responses, the District Court properly excused the
juror.
23
18 U.S.C. § 4241(d); United States v. Velasquez, 885 F.2d 1076, 1089 (3d Cir. 1989).
24
See U.S. v. Cameron,
464 F.2d 333, 334-35 (3d Cir. 1972) (per curiam).
25
See U.S. v. Vega,
285 F.3d 256, 265-67 (3d Cir. 2002).
26
S.A. 226, 228.
8
Third, we review the District Court’s provisional ruling to exclude evidence of
McDonald’s physical condition for abuse of discretion.27 The District Court
provisionally excluded the evidence because nothing in the case related to McDonald’s
physical infirmities, and noted that it would further consider the issue if McDonald
decided to testify. McDonald decided not to testify. Therefore, there was no abuse of
discretion.
Finally, regarding the District Court’s instruction not to allow sympathy to
influence the jury’s decision, the verdict “should not be based solely on the juror’s [sic]
emotional sensitivities, but on their evaluation of the actual evidence concerning the
crime and the defendant.”28 Therefore, the District Court properly instructed the jury.
E. Calculation of the Sentencing Guidelines Range
McDonald argues the District Court erred in calculating the Guidelines range,
which was enhanced because of added offense levels based on the amount of improper
benefit.29 We review the District Court’s findings of fact for clear error.30 The
government submitted information on improper benefit, which was calculated by taking
the price of soil disposal per ton, subtracting the direct cost of soil disposal per ton, and
multiplying by the number of tons of soil disposed. Using this formula, the improper
benefit is almost $14 million. McDonald does not dispute the methodology, but argues
the direct cost of $200 per ton is too low because an EPA report indicates $200 per ton is
27
Glass v. Phila. Elec. Co., 34 F.3d 188, 191 (3d Cir. 1994).
28
Lesko v. Lehman,
925 F.2d 1527, 1549 (3d Cir. 1991).
29
U.S.S.G. § 2B4.1.
30
United States v. Kluger,
722 F.3d 549, 555 (3d Cir. 2013).
9
only a portion of the direct cost. However, the direct cost estimate that the government
actually used was $257.73 or $284.28, depending on the site, and not $200. Also, the
EPA figure cited by McDonald is inapposite because it is the average cost to dispose a
ton of ash, not soil. Therefore, McDonald’s challenge likewise fails.
III.
For the forgoing reasons, we will affirm the judgment of the District Court.
10
