United States v. Timothy WellmanUnited States v. Timothy Wellman
COUNSEL
ARGUED: Kent Wicker, DRESSMAN BENZINGER LA VELLE PSC, Louisville, Kentucky, for Appellant. James T. Chapman, UNITED STATES ATTORNEY‘S OFFICE, Lexington, Kentucky, for Appellee. ON BRIEF: Kent Wicker, William H. Brammell, Jr., Kayla M. Campbell, DRESSMAN BENZINGER LA VELLE PSC, Louisville, Kentucky, for Appellant. James T. Chapman, Charles P. Wisdom, Jr., UNITED STATES ATTORNEY‘S OFFICE, Lexington, Kentucky, for Appellee.
OPINION
CHAD A. READLER, Circuit Judge. At first blush, this case has the familiar attributes of a classic bribery scheme: public officeholders raising money, a lucrative public contract, and suspicious campaign contributions to those officeholders from a company seeking the contract. Those attributes led federal authorities to open a grand jury probe into bribery allegations against two Lexington City Council members. Along the way, the probe uncovered numerous illegal straw campaign contributions orchestrated by local real estate developer Timothy Wayne Wellman, purportedly as quid pro quo for choosing Wellman‘s firm to fulfill the public contract. As federal investigators closed in, Wellman falsified documents and cajoled his straw contributors to lie about the fraudulent contribution scheme. That cover up proved worse than the purported underlying crime: federal prosecutors indicted Wellman for falsities and obstruction during the bribery investigation, but never bribery itself. A jury convicted Wellman on all counts.
On appeal, Wellman argues that insufficient evidence supports his convictions because, at most, he obstructed an investigation into violations of Kentucky campaign finance laws, not federal bribery. Wellman also alleges errors in his trial and sentencing. But a reasonable jury could conclude that Wellman corruptly obstructed, influenced, or impeded a federal grand jury proceeding. His other arguments are likewise unavailing. Accordingly, we affirm.
I.
In 2017, the City of Lexington began exploring options for relocating its city offices. A committee of the City Council solicited bids on the project, including one from CRM Companies, a local real estate development firm. Timothy Wayne Wellman functioned as an executive at CRM. While the committee deliberated on the CRM proposal, two City Council members began receiving campaign contributions from CRM employees. These actions prompted federal authorities to empanel a grand jury to investigate whether CRM, through the contributions, was improperly attempting to influence the City Council members in violation of
FBI agents questioned contributors from CRM about the reimbursement checks from Wellman. Contributors gave a variety of dubious stories to explain why those checks were not illicit reimbursements for political contributions. This “behavior impeding [the] investigation,” as it was described by an FBI forensic accountant, prompted prosecutors to open a separate grand jury inquiry into potential obstruction charges against Wellman. When
At trial, the FBI forensic accountant testified that the goal of the bribery investigation was to “follow the money” and interview straw contributors to “understand the nature of these contributions and the source of the money.” Agents detailed how straw contributors systematically lied to the FBI about Wellman‘s reimbursement checks during their bribery investigation. Later, multiple straw contributors took the stand to explain how Wellman offered to fund their political contributions if they gave money to the councilmen‘s campaigns and then pressed the contributors to adopt false stories about the reasons for his repayments. These stories ranged from fictional loans to compensation for past services rendered, including property leasing, cleaning, tree-cutting, tax preparation, and website design. To substantiate these stories and create a “paper trail,” Wellman fabricated (or asked contributors to fabricate) documents like fake IRS 1099s and invoices.
The jury convicted Wellman on all counts. Wellman was sentenced to a year and a day in prison, a $10,000 fine, and three years of supervised release. The district court applied a two-level obstruction of justice enhancement under U.S.S.G. § 3C1.1 but ultimately varied downward based on Wellman‘s character and service to the community. Wellman timely appealed both his conviction and sentence. While his appeal was pending, Wellman sought to delay his prison report date, a request the Court denied.
II.
Wellman was convicted under
A. To evaluate Wellman‘s sufficiency of the evidence challenge, we ask “whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” United States v. Maya, 966 F.3d 493, 498 (6th Cir. 2020) (quoting Musacchio v. United States, 577 U.S. 237, 243 (2016)). In view of this deferential
While our general standard for sufficiency challenges to a criminal conviction is well settled, our Circuit has yet to fully craft how that standard should be applied in the setting of sufficiency challenges to convictions under
The Supreme Court has used this framework in analyzing challenges to similar obstruction of justice convictions. One example is United States v. Aguilar, 515 U.S. 593 (1995). At issue there was a conviction for violating
Although the Supreme Court has yet to address similar issues with respect to conduct charged under
Today, with the benefit of our sister circuits’ reasoned analysis, we join in applying the nexus requirement to convictions under
The nexus requirement performs a “hemming function” by limiting criminal liability to defendants who have “notice
Whether that nexus requirement is satisfied, of course, will depend upon the nature of the evidence presented. On one end of the spectrum are cases in which a defendant “obviously” acts in contemplation of a grand jury proceeding by, for example, falsely testifying before the grand jury itself. Carson, 560 F.3d at 584. In those instances, one need not labor to see the relationship between obstructive conduct and an official proceeding. But the nexus analysis may be tougher where a defendant‘s obstructive conduct is more attenuated from the proceeding in time or purpose, as might happen if a defendant aims to obstruct an official proceeding that has not yet commenced. See Young, 916 F.3d at 386–87. And in close cases, we must be careful to avoid conflating obstruction of an official proceeding with obstruction of a mere criminal investigation unconnected with an official proceeding. See United States v. Sutherland, 921 F.3d 421, 425–26 (4th Cir. 2019) (citing United States v. Ermoian, 752 F.3d 1165, 1171 (9th Cir. 2013)). To distinguish the two, we look for specific evidence in the record, beyond mere speculation, that a defendant reasonably foresaw an “official proceeding” when he committed obstructive acts. See Young, 916 F.3d at 387. If the evidence reveals that a defendant acted with awareness “that he was the target of an investigation” and that “the government might be trying to build a case against [him],” the nexus requirement is satisfied. United States v. Perisco, 645 F.3d 85, 108 (2d Cir. 2011); see United States v. Simpson, 741 F.3d 539, 552 (5th Cir. 2014).
B. Applying these nexus principles to today‘s dispute, we conclude that, on balance, there was sufficient evidence for a reasonable juror to conclude that Wellman, at the time of his obstruction, understood he was the target of an FBI investigation and that the government was building a case against him. For example, straw contributor Tommy Sikes testified that Wellman suggested he lie to the FBI because “they‘re looking at me for campaign violations.” Straw contributor Kathye Hollopeter was told by Wellman that he wanted to create more of a “paper trail” to bolster his false stories. To do so, Wellman cashed purported loan-repayment checks from Hollopeter days before the grand jury convened. Straw contributor William “Buddy” Stone testified that after he talked to the FBI, Wellman asked him to sign a document falsely stating that he had borrowed $1,000 from Wellman as a personal loan. Finally, Wellman coached straw contributor Veronica Saylor to say that the reimbursements she received from him were for tax preparation services, a story Wellman sought to bolster by providing Saylor with a false IRS 1099 form after FBI agents had spoken with her. From this evidence, the jury could conclude that Wellman foresaw he would be the subject
In many respects, Wellman‘s case parallels United States v. Binday, 804 F.3d 558 (2d Cir. 2015). There, the defendants destroyed evidence after realizing that the FBI had begun to interview “straw buyers” intertwined in the defendants’ fraudulent life-insurance scheme. Id. at 588. The Second Circuit concluded that the defendants’ destruction of “documents relevant to a massive fraud” upon learning that the FBI was investigating the fraud provided an adequate basis to find that the defendants’ conduct “had ‘the natural and probable effect of interfering with a judicial or grand jury proceeding.’” Id. at 591 (quoting Quattrone, 441 F.3d at 171). So too here.
Wellman‘s counterarguments largely dispute the foreseeability of the outcome of the investigation—that no federal bribery charges resulted—or the purpose of the investigation—speculation about the FBI‘s true motive. Neither argument can overcome the evidence of Wellman‘s corrupt intent. With respect to foreseeability, it bears reminding that Wellman need not have known an official proceeding was ongoing, just that it was foreseeable his conduct would interfere with one. See
As to purpose, Wellman is of the view that the government was investigating potential violations of state, not federal, law. The evidence, however, tells a different story. As part of a federal grand jury investigation into federal funds bribery, the FBI interviewed Wellman‘s straw contributors to determine whether they had acted independently or on Wellman‘s behalf. During those interviews, agents witnessed what “appeared to be obstructive behavior,” which prompted the government to open an obstruction case. Still, the federal funds bribery investigation continued. As an FBI forensic accountant testified, the
III.
Wellman next asserts that insufficient evidence supports his convictions for aiding and abetting false statements under
Wellman‘s procured falsities about the straw contribution scheme were material to the FBI‘s bribery investigation. The stated goal of the investigation was to “follow the money” and ascertain the true nature of the campaign contributions to reveal whether any bribery of public officials took place. And truthful statements about the transfers of money and the reasons for those transfers would have assisted that investigation.
Whether Wellman‘s falsities fell within the realm of information already known to the FBI is irrelevant to the materiality inquiry. See United States v. LeMaster, 54 F.3d 1224, 1230–31 (6th Cir. 1995). Statements aimed at misdirecting agents and their investigation satisfy the materiality requirement of
Resisting this conclusion, Wellman contends that each straw contributor truthfully admitted that Wellman was the source of the reimbursed funds, and that Wellman‘s procured lies related only to the reasons for each reimbursement—a fact immaterial to all but potential violations of Kentucky campaign finance laws. But even operating from the baseline assumption that Wellman‘s conduct violated state law, the FBI had cause to delve deeper because Wellman‘s intent in funneling straw contributions to the councilmen was a central focus of the FBI‘s bribery investigation. See LeMaster, 54 F.3d at 1230 (concluding that false statements were material where “[a state legislator‘s] receipt of cash and his reason for accepting it were the very core of the FBI‘s investigation”). Logically, the FBI could ask why Wellman would devise a straw contribution scheme with corrupt intent to hide a large, illicit donation from his own pocket. At least one possibility would be to increase the likelihood of quid pro quo bribery. See United States v. Terry, 707 F.3d 607, 613–14 (6th Cir. 2013). Unsurprisingly, the FBI could conclude the same. Conversely, if each straw contributor made campaign contributions on his or her own accord and merely sought, in good faith, a supporting loan that Wellman willingly obliged, the prospect of unearthing an illegal bribery scheme would appear dimmer. In short, the jury had an adequate basis to conclude that statements obfuscating Wellman‘s true intent in arranging straw contributions were material to the FBI‘s bribery investigation.
B. Wellman‘s procured false statements also satisfy the jurisdictional element of his convictions under
Wellman‘s procured false statements to FBI investigators fall under
C. Finally, Wellman argues that insufficient evidence supports Counts 2 (Jeff Collins), 6 (Tom Nash), and 8 (Tom LeMaster) because each individual denied at trial that Wellman encouraged him to lie to the FBI. Yet other evidence exists from which the jury could conclude that Wellman procured their lies.
Collins testified at trial that Wellman‘s reimbursement check was “for leasing condos” and that Wellman never told him to lie to the FBI. But Wellman gave the $1,000 check to Collins around the same time that Collins made a $1,000 political contribution. The two later had a “discussion” in which Wellman “let[] [Collins] know” the check was for leasing, indicating that Wellman cooked up the leasing story for Collins to share. In a similar vein, the jury heard that Collins‘s trial testimony about both the reason for the reimbursement and Wellman‘s apparent desire to want him to stick to the condo leasing story contradicted his prior testimony before the grand jury. This inconsistency further supports the conclusion that Collins lied to the FBI at Wellman‘s behest, contrary to Collins‘s trial testimony.
Nash testified truthfully at trial that Wellman asked him to be a straw contributor and that each reimbursement check was for his political contribution. But that story conflicted with what he previously told the FBI: that each check was money owed for a “real estate deal” on a Florida condominium. When confronted with this contradiction at trial, Nash variously claimed not to remember his prior statements or that it was his idea, not Wellman‘s, to use the real estate debt to justify the reimbursement. A jury could conclude from this contradiction that Nash lied to the FBI, and that Wellman caused that lie. Nash, notably, shared the real estate story only after talking to Wellman. The prospect that Wellman convinced Nash to lie is buttressed by Nash‘s testimony that Wellman angrily exclaimed “I knew you didn‘t have the balls” when Nash said he planned to plead the Fifth at trial. And Nash resigned shortly before trial after almost 20 years at CRM following a conversation about “what [he] was going to do” at trial, further suggesting that Wellman procured Nash‘s falsehoods.
Finally, LeMaster first told the FBI that Wellman‘s $1,000 check was payment for a side job cutting trees. But LeMaster later recounted how Wellman offered to loan him $1,000 to make a political contribution. Upon asking Wellman “What am I supposed to say if people asked me where I got this money?,” Wellman replied, “Just tell them the truth. . . . [Y]ou work for me, don‘t you?” LeMaster admitted that Wellman‘s tree-cutting story “was in [his] mind” when he gave that
The context in which Collins, Nash, and LeMaster lied also points to Wellman‘s involvement. For one, the evidence showed a pattern of Wellman procuring false statements from straw contributors who then lied at Wellman‘s request about the reason for the payments. For another, the government proved a tight temporal proximity between the campaign contributions and Wellman‘s reimbursements, indicating these checks were illicit reimbursements even if Collins, Nash, and LeMaster offered contrary explanations. Finally, evidence of Wellman‘s close relationships with these witnesses—including Nash‘s statement to the jury, “I trust him with my life”—suggests they had motive to lie to the FBI to protect Wellman. Adding in evidence of pattern and temporal proximity, the record at trial sufficiently demonstrated Wellman‘s knowing procurement of false statements.
IV.
Wellman next contends that the government engaged in prosecutorial misconduct by (1) threatening to charge witness Liz Stormbringer with perjury and (2) implying that Wellman had the burden of proof during closing statements. As Wellman raised both arguments in motions for a mistrial, we review for abuse of discretion. United States v. Howard, 621 F.3d 433, 458 (6th Cir. 2010).
A. Wellman‘s first misconduct claim is grounded in due process. The right to due process “precludes prosecutors . . . from improperly threatening witnesses with perjury prosecution.” United States v. Stuart, 507 F.3d 391, 398 (6th Cir. 2007) (citing Webb v. Texas, 409 U.S. 95, 97–98 (1972) (per curiam)). In light of the ramifications of false testimony, however, “merely warning a witness of the consequences of perjury” does not “demand[] reversal.” Id. (quoting United States v. Pierce, 62 F.3d 818, 832 (6th Cir. 1995)). To the contrary, “in many circumstances, warning a witness about the possibility and consequences of perjury charges is warranted.” United States v. Hernandez-Escobar, 911 F.3d 952, 959–60 (9th Cir. 2018) (citation omitted). Indeed, we have recognized that the government may have an affirmative duty to warn of perjury‘s risks where a witness lacks representation. Stuart, 507 F.3d at 398. What is more, dissuading witnesses from committing perjury preserves the legitimacy of verdicts that rest on their testimony and bolsters public confidence in the judicial system. See United States v. Alvarez, 567 U.S. 709, 720–21 (2012) (plurality opinion). For these reasons, to establish that a witness was “improperly threaten[ed],” a defendant must show that (1) the government substantially interfered with the “witness‘s free and unhampered determination to testify,” and (2) any error was not harmless. Stuart, 507 F.3d at 398 (quoting United States v. Foster, 128 F.3d 949, 953 (6th Cir. 1997)).
Liz Stormbringer was a straw contributor the government called to testify at trial as a hostile witness. During her testimony, Stormbringer contradicted aspects of her grand jury testimony in which
On this record, the prosecutor did not substantially interfere with Stormbringer‘s ability to testify freely. As a factual matter, the prosecutor pointed out a plain contradiction in the sworn testimony given by Stormbringer, a quintessential example of perjury. And as a functional matter, prosecutors assured Stormbringer‘s counsel they would consider perjury charges regardless of whether she changed her testimony or decided to “take the Fifth,” meaning Stormbringer had less to gain from later changing her testimony. What is more, Stormbringer‘s own counsel warned her about possible perjury, insulating her from direct government coercion. See id. at 399; United States v. Serrano, 406 F.3d 1208, 1216 (10th Cir. 2005) (“The potential for unconstitutional coercion by a government actor significantly diminishes, however, if a defendant‘s witness elects not to testify after consulting an independent attorney.” (emphasis in original) (citation omitted)).
The bench-conference warning here contrasts sharply with unconstitutional attempts at intimidation and ex parte threats by prosecutors or their agents in other cases. See, e.g., Foster, 128 F.3d at 953–54; United States v. Thomas, 488 F.2d 334, 336 (6th Cir. 1973) (per curiam). And even if the prosecutor‘s conduct amounted to coercion, there is nothing to suggest this isolated event can clear the harmless-error hurdle. There was thus no error by the district court in denying Wellman‘s motion for a mistrial on this ground.
B. Wellman also argues that a prosecution statement during closing argument warrants a new trial. Here, Wellman invokes his rights protected by the Fifth Amendment, which “forbids . . . comment by the prosecution on the accused‘s silence.” Griffin v. California, 380 U.S. 609, 615 (1965). Nor may the prosecution indirectly comment on the accused‘s silence by suggesting that the defendant must produce evidence to prove his innocence. See Wogenstahl v. Mitchell, 668 F.3d 307, 332 (6th Cir. 2012). Yet Wellman alleges that is exactly what happened during closing argument when prosecutors alluded to the omission of a fake loan document referenced at trial:
Prosecutor: But then when Wellman called [Buddy Stone] in, after he had heard what Buddy had done, he tried to correct the damage or limit the damage by asking Buddy to sign a false statement saying it was a loan. Now, we never saw that statement. They decided not to bring it out, but it is part of the conduct . . . .
R. 85, PageID##1313–14 (emphasis added).
Contrary to Wellman‘s assertion, there was nothing improper about the prosecutor‘s statement. Prosecutors are “entitled to point out the lack of evidence supporting” a theory—namely, that Wellman‘s dealings with CRM employees were all above board. United States v. Forrest, 402 F.3d 678, 686 (6th Cir. 2005). And they have especially “wide latitude” to do so during closing argument. United States v. Boyd, 640 F.3d 657, 669 (6th Cir. 2011) (citation omitted).
With neither instance of prosecutorial misconduct warranting a new trial on its own, Wellman asserts they can succeed together. But Wellman‘s further claim of “cumulative error fails for want of error.” United States v. Ledbetter, 929 F.3d 338, 365 (6th Cir. 2019).
V.
Turning from his conviction to his sentence, Wellman contends that the district court imposed a procedurally unreasonable sentence when it applied a two-level obstruction of justice enhancement under U.S.S.G. § 3C1.1. Section 3C1.1 provides a two-level enhancement if “the defendant willfully obstructed or impeded . . . the administration of justice with respect to the investigation, prosecution, or sentencing of the instant offense of conviction.” U.S.S.G. § 3C1.1. In view of Wellman‘s conviction for obstruction, a § 3C1.1 enhancement is appropriate if Wellman committed further obstruction during his underlying prosecution for obstruction. See Carson, 560 F.3d at 589.
We will assume, for sake of argument, that this mixed question of fact and law is reviewed de novo. See United States v. Thomas, 933 F.3d 605, 608 (6th Cir. 2019) (noting that “our court has sent mixed messages on the standard of review” where a district court applies § 3C1.1 to a particular set of facts, with some cases reviewing de novo, others for clear error, and a few incorporating elements from both standards). Yet even under fresh review, Wellman‘s efforts to pay off the truck lease of Amanda Hicks‘s husband amounted to further obstruction of Wellman‘s obstruction prosecution. Hicks, a CRM accountant, was another straw contributor for Wellman. She testified that, upon learning of the FBI‘s investigation, she discussed with Wellman her concerns that the FBI might interview her about Wellman‘s reimbursement checks. Wellman told her to say the money was an unrelated personal loan. To document that understanding, Hicks, following her conversation with Wellman, wrote Wellman checks for the $3,000 she purportedly had “borrowed,” which Wellman then cashed days before Hicks‘s grand jury testimony. After testifying, Hicks asked Wellman to reimburse her for the $3,000 she had paid for the phony loan. Wellman agreed. But he worried that repaying Hicks directly would expose his false story about the loan. To cover his tracks, Wellman paid $3,000 towards Hicks‘s husband‘s truck loan. That payment, made about two months after Wellman‘s indictment on obstruction charges, constitutes further obstruction for purposes of § 3C1.1. See Carson, 560 F.3d at 589 (citing § 3C1.1 cmt. n.7).
Nor did the district court err by crediting Hicks‘s testimony over Wellman‘s when Wellman denied at sentencing
Wellman‘s final argument is that the district court engaged in impermissible double-counting. That category of error occurs if “precisely the same” conduct supports the underlying offense and an enhancement. United States v. Sabino, 307 F.3d 446, 450 (6th Cir. 2002) (citation omitted). By the same token, “[n]o double counting occurs if the defendant is punished for distinct aspects of his conduct.” United States v. Walters, 775 F.3d 778, 782 (6th Cir. 2015) (citation omitted). Here, distinct conduct supports Wellman‘s underlying obstruction offense and the § 3C1.1 enhancement—paying off Hicks‘s husband‘s truck loan obstructed the prosecution of Wellman‘s obstruction offense; it did not obstruct the grand jury‘s investigation into bribery, the conduct comprising Wellman‘s underlying offense. Because Wellman‘s conviction and enhancement arose from distinct conduct, Wellman‘s double-counting argument fails.
*
*
*
For the foregoing reasons, we affirm the judgment of the district court.