United States v. Steve Hale
2017 U.S. App. LEXIS 8527
4th Cir.2017Background
- Steven M. Hale owned and operated Double D Distributing, a warehouse that bought and resold large quantities of over‑the‑counter medicines and health‑and‑beauty products.
- Investigators found routine deliveries to Hale’s warehouse from Bonnie Bridges and others who obtained goods from professional shoplifters (“boosters”); surveillance, marked items in a FedEx shipment, and a warehouse “cleaning station” supported the theft scheme.
- Witnesses (suppliers, a purchaser, and warehouse worker Sharon Cooke) testified that Hale paid cash, used codenames in ledgers, had stickers/sensors removed, and counseled associates after law‑enforcement searches; Hale also withdrew large sums and attempted to mask a boat’s ownership.
- Hale was tried and convicted on counts including conspiracy and transporting stolen goods in interstate commerce (18 U.S.C. § 2314), false tax statements, failure to collect/pay employee taxes (26 U.S.C. § 7202), and obstruction; he was sentenced to 97 months.
- On appeal Hale primarily challenged: (1) the district court’s willful‑blindness instruction and sufficiency of knowledge evidence; (2) certain evidentiary rulings; (3) jury instructions; (4) the employee vs. independent contractor finding for Cooke; and (5) alleged prosecutorial misconduct.
Issues
| Issue | Hale's Argument | Government's Position | Held |
|---|---|---|---|
| Whether willful‑blindness instruction was justified | Instruction was not supported by evidence of deliberate ignorance and thus improper | Evidence supported both actual knowledge and deliberate avoidance of confirming goods were stolen | Affirmed — instruction justified by substantial evidence of subjective high probability and deliberate avoidance |
| Form of willful‑blindness instruction | Language failed to define “subjectively” and permissibly allowed conviction on circumstantial chain | Defense waived objection to form; instruction tracked Supreme Court precedent and was accurate as a whole | Affirmed — waiver; instruction legally sufficient even if reviewed on merits |
| Admission of evidence about boosters’ drug addiction, prior related prosecution, and Brock’s testimony | Such evidence was irrelevant, prejudicial, or impermissible character/hearsay evidence | Evidence was probative: addiction explained the booster network; prior dealings were waived/limited and relevant; Brock’s testimony showed his state of mind | Affirmed — no plain error; admissions proper or waived |
| Whether Cooke was an employee for tax counts | Cooke was self‑employed/independent contractor; Hale lacked proof she was an employee | Evidence showed exclusive, full‑time work for Hale, equipment and direction from Hale, and payroll entries | Affirmed — substantial evidence supported jury’s finding that Cooke was an employee |
| Prosecutorial closing statements about fueling drug addiction | Closing improperly appealed to jurors’ passions and denied fair trial | Statements were a fair summary of the evidence and not plain error without timely objection | Affirmed — no plain error; statements were supported by record |
Key Cases Cited
- Global‑Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011) (establishes two‑part willful‑blindness test: subjective belief of high probability and deliberate avoidance)
- United States v. Jinwright, 683 F.3d 471 (4th Cir. 2012) (approving careful use of willful‑blindness instruction under Global‑Tech)
- United States v. Lighty, 616 F.3d 321 (4th Cir. 2010) (cautioning that willful‑blindness instructions must not permit convictions for negligence or recklessness)
- United States v. Ruhe, 191 F.3d 376 (4th Cir. 1999) (upholding willful‑blindness instruction where defendant accepted items without normal documentation)
- United States v. Rahman, 83 F.3d 89 (4th Cir. 1996) (instruction must accurately state controlling law)
- United States v. Strickland, 245 F.3d 368 (4th Cir. 2001) (once conspiracy established, only a slight connection between defendant and conspiracy is needed)