United States v. Kenneth Kennedy
714 F.3d 951
6th Cir.2013Background
- S. Kennedy and Scarborough operated a multi-year fraud soliciting investments in fictitious real estate deals and an inheritance scheme tied to S. Kennedy, defrauding dozens of victims of over $3 million.
- K. Kennedy and Scarborough acted as co-conspirators with S. Kennedy; Scarborough controlled ASK, LLC and SEK, LLC accounts and helped solicit funds via promissory notes with high interest.
- Investors were promised guaranteed returns and, if needed, repayment from S. Kennedy’s purported inheritance, but no real estate deals or inheritance existed.
- Investors’ funds were diverted for personal use by Scarborough and K. Kennedy, with some funds used to support S. Kennedy’s medical care, lifestyle, and other expenses.
- In September 2010, a grand jury charged K. Kennedy and Scarborough with multiple counts of wire and mail fraud, and Scarborough with an additional money-laundering count; both were tried together in a two-week trial.
- The district court denied Rule 29 motions challenging the sufficiency of the evidence and later sentenced K. Kennedy to 100 months and Scarborough to 72 months, with substantial restitution; both appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of the evidence for fraud | K. Kennedy and Scarborough contend the evidence failed to prove intent and scheme. | K. Kennedy asserts no awareness or intent; Scarborough argues lack of fraudulent purpose. | Sufficient evidence supported willful participation and foreseeability; convictions affirmed. |
| Review of jury note and juror interviews | Right to access jury communications and interview jurors supports challenge to verdict. | No entitlement to vote counts or post-verdict juror interviews. | District court's handling of the jury note was proper; post-verdict interviews barred; no reversible error. |
| Calculation of loss and number of victims for sentencing | Losses and victims should reflect the full scope of the conspiracy and foreseeability. | Should limit to amounts actually known or caused by specific conduct. | Court properly attributed losses over $2.5 million and more than 50 victims under the guidelines; enhancements upheld. |
| Obstruction of justice enhancement for Scarborough | Perjury not shown or not material to the offense. | Her trial testimony matched interview statements; no perjury. | Obstruction enhancement properly applied based on material, willful false testimony. |
Key Cases Cited
- Jackson v. Virginia, 443 F.3d 307 (U.S. 1979) (sufficiency standard: rational trier of fact could find elements beyond reasonable doubt)
- United States v. Swidan, 892 F.2d 1076 (6th Cir. 1989) (forfeiture of sufficiency claims when no renewal after complete evidence)
- United States v. Campbell, 279 F.3d 392 (6th Cir. 2002) (scope of conspiracy and foreseeability in sentencing)
- United States v. Hamilton, 263 F.3d 645 (6th Cir. 2001) (review of factual findings for clear error in sentencing)
- United States v. DeSantis, 134 F.3d 760 (6th Cir. 1998) (intent for mail fraud may be shown by recklessness)
- United States v. Frost, 125 F.3d 346 (6th Cir. 1997) (elements of mail fraud and evidence of intent)
- United States v. Boring, 557 F.3d 707 (6th Cir. 2009) (perjury findings require specific factual predicates)
- Logan v. United States, 250 F.3d 350 (6th Cir. 2001) (juror interviews limited; internal-influence concerns)