People v. Schrauben
314 Mich. App. 181
| Mich. Ct. App. | 2016Background
- Defendant and Michael Lehman co-owned two funeral homes that sold prepaid funeral plans; defendant later sold his share and then returned as an employee but allegedly was barred from financial duties.
- Lehman discovered irregularities after defendant worked at the Ionia chapel: clients' checks were payable to Schrauben Management (defendant’s holding company) and some escrow/insurance payouts occurred before beneficiaries’ deaths; Lehman’s signatures appeared forged on endorsements and death-related documents.
- Defendant was convicted by a jury of multiple counts: uttering and publishing, forgery, and fraudulent insurance acts; sentenced to jail/prison terms. The court granted directed verdicts of acquittal on counts for embezzlement, conducting a criminal enterprise (CCE), and receiving CCE proceeds; the prosecution cross-appealed that dismissal.
- Defendant moved for a new trial alleging Lehman perjured himself; the trial court held an evidentiary hearing revealing inconsistencies in Lehman’s testimony but found no prosecutorial knowledge of perjury and denied a new trial.
- Defendant raised ineffective assistance (trial counsel failed to develop/expose Lehman’s false testimony), prosecutorial misconduct (arguing defense counsel was deliberately misleading), sentencing claims (intermediate sanction under MCL 769.34(4)(a)), and OV 4 scoring; the Court reviewed each and largely affirmed.
- On the prosecution’s cross-appeal the Court held the money at issue never belonged to the funeral home (it remained escrow funds of beneficiaries) so embezzlement and related CCE convictions were properly dismissed.
Issues
| Issue | Prosecutor's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion for new trial based on Lehman’s alleged perjury | Lehman’s testimony supported convictions; inconsistencies do not show prosecutorial knowledge of perjury and other independent evidence implicates defendant | Lehman perjured himself; perjury was material and likely affected jury verdicts | Denied — no evidence prosecution knew of perjury; other strong evidence implicated defendant, so no abuse of discretion in denying new trial |
| Ineffective assistance of counsel for not developing/exposing Lehman’s false testimony | Counsel’s strategy was reasonable; defendant failed to show performance fell below standard or prejudice | Counsel should have introduced/explored specific discrepancies (death timing, bank identity, unfiled claims) to impeach Lehman | Denied — counsel’s choices were strategic; defendant failed Strickland test |
| Prosecutorial misconduct in closing (calling defense counsel a "mud slinger") | Remarks were improper but jurors were instructed arguments are not evidence; a timely objection could have cured prejudice | Prosecutor suggested defense counsel intentionally misled jury, undermining presumption of innocence | No reversal — improper but jurors’ instruction and lack of timely objection cured error; not plain error affecting substantial rights |
| Sentencing: requirement to impose intermediate sanction under MCL 769.34(4)(a) / Alleyne challenge | Intermediate sanction no longer mandatory after Lockridge; court may impose prison within guidelines; sentencing facts need not be jury-found beyond reasonable doubt | Court should have imposed intermediate sanction absent substantial and compelling reasons; upward departure violated Alleyne | Denied — Lockridge rendered intermediate-sanction mandate nonmandatory; sentence within guideline range affirmed |
| OV 4 scoring (10 points for serious psychological injury) | Victim’s letter and trial demeanor support serious psychological injury requiring treatment | Injury not serious; victim did not seek treatment | Affirmed — trial court’s finding not clearly erroneous; preponderance of evidence supported 10 points |
| Cross-appeal: dismissal of embezzlement, CCE, CCE proceeds (whether money belonged to funeral home) | Prosecution argued defendant’s wrongful acts caused title to pass to funeral home, supporting embezzlement | Money remained escrow/property of beneficiaries until death and provider performance; thus did not belong to funeral home | Affirmed dismissal — funds remained beneficiaries’ escrow; embezzlement requires money belonging to principal, so convictions properly dismissed |
Key Cases Cited
- People v. Cress, 468 Mich. 678 (standard of review for new-trial motions)
- People v. Aceval, 282 Mich. App. 379 (perjured testimony and due process inquiry)
- United States v. Agurs, 427 U.S. 97 (materiality standard for false testimony)
- Strickland v. Washington, 466 U.S. 668 (ineffective-assistance standard)
- People v. Vaughn, 491 Mich. 642 (presumption of effective counsel; burdens)
- People v. Fyda, 288 Mich. App. 446 (forfeiture and plain-error review for prosecutorial misconduct)
- People v. Unger, 278 Mich. App. 210 (prosecutor latitude; juror instruction weight)
- People v. Watson, 245 Mich. App. 572 (prosecutor cannot suggest defense counsel is intentionally misleading jury)
- People v. Lockridge, 498 Mich. 358 (severing mandatory aspects of sentencing guidelines)
- Alleyne v. United States, 570 U.S. 99 (jury finding required for facts increasing mandatory minimums)
- People v. Lueth, 253 Mich. App. 670 (elements of embezzlement by agent/employee)
- People v. Armstrong, 305 Mich. App. 230 (OV 4—examples of psychological injury)
- People v. Steanhouse, 313 Mich. App. 1 (offense-variable scoring standards and trial-court demeanor weight)
- People v. Riley, 468 Mich. 135 (standard for reviewing directed verdicts)