United States v. Isreal Hawkins, Jr., 796 F.3d 843

Background

Petro America, founded by Isreal Hawkins, was a sham oil/gas/mining company whose stock (unregistered) was sold to over 12,000 investors for at least $10.2 million; Hawkins and several coconspirators (Brown, Heurung, Miller, Roper) pitched the company and profited.
Missouri Securities Division issued a Cease and Desist Order in Nov. 2008 prohibiting offers/sales of Petro America securities in Missouri; defendants knew of the Order but continued promotions and sales.
Hawkins led high‑energy shareholder meetings and promoted massive asset valuations; Heurung hosted conference calls and acted as a public financial spokesman; Brown and Roper sold large quantities of shares gifted by Hawkins.
IRS criminal investigation (including a search of Brown’s home) and Hawkins’ arrest followed; all five defendants were tried jointly; each convicted on the charged counts.
On appeal defendants challenged multiple rulings: severance, denial of subpoenas/experts, juror misconduct, Batson strike, admission of a government summary exhibit (Exhibit 1000), sufficiency of the evidence, and sentencing enhancements for Heurung.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Denial of severance (Brown)	Joint trial appropriate; overlap in proof	Brown: Hawkins’ pro se, antagonistic defense prejudiced her and jury couldn’t compartmentalize	Affirmed — defenses not irreconcilable; court gave adequate safeguards/instructions
Rule 17(b) subpoenas / expert funds (Roper)	Not raised by government (respondent)	Roper: needed securities expert, geologists, and witnesses to present good‑faith defense	Affirmed denial — defendant failed to show testimony would be both material and favorable
Juror misconduct / new trial (Hawkins)	Juror lied about acquaintance with witness; bias requires new trial	Government: juror disclosed employer; no proof of dishonesty or partiality	Affirmed — McDonough standard not met; no clear error
Batson challenge to peremptory strike (Heurung)	Strike was race‑based	Government: race‑neutral reason — juror’s demeanor/statements about son’s prosecution suggested possible partiality	Affirmed — trial court’s demeanor findings plausible; no clear error
Admission of Exhibit 1000 (summaries) (Heurung)	Admitted late; argumentative; summarized witness testimony improperly	Government: Rule 1006 / Rule 611 permitted summary and pedagogic use	Conviction affirmed — admission into evidence was error but harmless given overwhelming proof and safeguards
Sufficiency of evidence (Miller & Roper)	Insufficient proof of knowledge or willful blindness	Government: evidence of insider roles, red flags, continued sales after Order/arrest supports knowledge or willful blindness	Affirmed — reasonable juror could find knowledge/willful blindness; wire fraud and laundering supported
Sentencing: manager/supervisor & loss (Heurung)	Heurung: no control over others; should not be liable for pre‑joining acts	Government: Heurung supervised promotion, exercised decision authority; loss attributable as foreseeable	Affirmed — district court’s role‑finding not clearly erroneous; entire loss reasonably attributed

Key Cases Cited

United States v. Jarrett, 684 F.3d 800 (8th Cir.) (joinder of coconspirators normally favored)
United States v. Payton, 636 F.3d 1027 (8th Cir.) (standard for severance review)
Zafiro v. United States, 506 U.S. 534 (1993) (limits on severance vs. admissible evidence in joint trials)
McDonough Power Equip., Inc. v. Greenwood, 464 U.S. 548 (1984) (framework for juror bias/new‑trial based on questionnaire dishonesty)
Batson v. Kentucky, 476 U.S. 79 (1986) (three‑step test for peremptory strike discrimination)
United States v. Green, 428 F.3d 1131 (8th Cir.) (Rule 1006 summary admissibility principles)
United States v. Crockett, 49 F.3d 1357 (8th Cir.) (permissibility and limits of pedagogic devices summarizing testimony)
United States v. Gaines, 639 F.3d 423 (8th Cir.) (standards for manager/supervisor enhancement under U.S.S.G. § 3B1.1)