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United States v. Shabazz

United States Court of Appeals, Eleventh Circuit

April 18, 2018

UNITED STATES OF AMERICA, Plaintiff - Appellee,
QADIR SHABAZZ, a.k.a. Deangelo Moore, a.k.a. Deangelo Muhammad, Defendant-Appellant.

          Appeal from the United States District Court for the Northern District of Georgia D.C. Docket No. 1:13-cr-00441-TCB-CMS-1

          Before WILLIAM PRYOR, JULIE CARNES, Circuit Judges, and CORRIGAN, [*] District Judge.


         Qadir Shabazz orchestrated a multi-state tax-fraud scheme using Indigent Inmate, a prisoner "charity" he founded and financed. Prisoners interested in receiving financial support, religious materials, and other assistance items completed applications that required them to provide personal identifying information. Shabazz and his associates then used that information to submit fraudulent tax returns and collect fraudulent tax refunds. This appeal requires us to decide several questions about Shabazz's convictions and sentence for conspiracy, wire fraud, aggravated identity theft, and theft of government funds: (1) whether the district court clearly erred when it admitted evidence seized from Shabazz's clothing during the execution of a search warrant as well as Shabazz's post-arrest statements; (2) whether the district court abused its discretion when it admitted evidence of uncharged conduct and photographs of Shabazz and his wife with large sums of money; (3) whether the district court violated Shabazz's right not to wear jail clothes after he waived his right to appear in street clothes; (4) whether the district court erred when it instructed the jury about conspirator liability under Pinkerton v. United States, 328 U.S. 640 (1946); (5) whether sufficient evidence supports Shabazz's convictions for conspiracy and aggravated identity theft; and (6) whether the district court erred when it calculated Shabazz's Sentencing Guidelines range or imposed a substantively unreasonable sentence. We affirm Shabazz's convictions and sentence.

          I. BACKGROUND

         From 2009 to 2012, Qadir Shabazz used Indigent Inmate, a "charity" he founded and financed, to defraud prisoners throughout the country. According to the "Member Handbook, " the nonprofit served "to aid and assist those who are incarcerated" by "provid[ing] inspirational literature, news paper [sic] subscriptions and financial assistance to those in need." But the evidence at trial established that the nonprofit instead served to enrich Shabazz and his associates at the expense of inmates seeking assistance.

         Employees of Indigent Inmate mailed prisoners applications that requested their personal identifying information, including their social security numbers and dates of birth. One employee of Indigent Inmate testified that she marked applications "disqualified" if they indicated that applicants had student loans, owed child support, or listed an incorrect Social Security number or booking number. Members of the conspiracy then used the personal identifying information to file fraudulent income tax returns seeking tax refunds. And they formed corporations in the names of applicants to allow the conspirators to access the funds. For example, Shabazz or one of his coconspirators created a corporation in the name of William Malone, Inc., created a William Malone, Inc., account, deposited a fraudulently obtained refund check issued to William Malone, an Indigent Inmate applicant, into that account, and wrote a check drawn on that account to Shabazz. Investigators also found a debit card for the account in Shabazz's wallet. Similarly, a corporation was created in the name of another Indigent Inmate applicant, Sandra Oyawusi, and investigators found a debit card for that account in another one of Shabazz's wallets.

         Shabazz professed to have four wives-at least two of whom helped him with the day-to-day operations-but Shabazz was in charge of Indigent Inmate. For example, forms filed with the Georgia Secretary of State listed Leslie Scott- also known as Leslie Shabazz-as the CEO and registered agent of the company. And Sheena Shabazz directly managed some, if not all, of the employees. But Qadir Shabazz rented the office space, hired employees, paid the employees, and held himself out as the president.

         The investigation of the scheme began in Pennsylvania. Agents from the Pennsylvania Attorney General's Office and Pennsylvania Bureau of Revenue began investigating fraudulent state tax returns that listed 2615 Brownsville Road, Pittsburgh, Pennsylvania, as the taxpayer address. The agents discovered that one of Shabazz's associates, Dion McBride, was involved in a prisoner tax-fraud scheme, and McBride later informed the agents that Shabazz was responsible for that scheme.

         After further investigation, the agents obtained search warrants for a residence at 2864 Cheney Street, East Point, Georgia and the Indigent Inmate headquarters at 1677 Dorsey Avenue, East Point, Georgia. To establish probable cause, the search-warrant affidavit detailed evidence of the involvement of Shabazz and his wives. That evidence included not only McBride's statements, but also bank records, phone records, and surveillance records.

         Shabazz and Leslie Shabazz were present at the Cheney Street address when the agents arrived to execute the warrant. Because Shabazz was wearing only boxer shorts and a T-shirt, an agent located a pair of pants at Shabazz's direction, confirmed with Shabazz that the pants were his, and emptied the pockets. The agent then discovered and seized a number of credit cards and identification cards that were in a wallet in one of the pockets. One of those cards was the debit card for the William Malone, Inc., bank account.

         The agents also executed the search warrant for the Indigent Inmate headquarters at the Dorsey Avenue address. They seized 12 boxes of completed Indigent Inmate applications and approximately 20 computers on which investigators discovered over 90 fraudulent tax returns. Pennsylvania agents created a spreadsheet with the information obtained from the completed applications and sent the spreadsheet to the Internal Revenue Service. An investigative analyst recorded the information in an electronic master file of tax-return filings and noticed that 15 mailing addresses were repeatedly listed on the returns. She then created a summary spreadsheet that showed the number of returns filed and the refund amount requested for the 15 addresses. More than 2, 000 tax returns included prisoner information from the Indigent Inmate files and listed one of the 15 common addresses.

         The evidence established a number of connections between Shabazz and the fraudulent returns. He was directly or indirectly connected to 11 of the 15 addresses. For example, Shabazz leased four of the addresses: 2945 Orr Drive, 1677 Dorsey Avenue, 1782 Neely Avenue, and 1447 Walker Avenue. And like many of the fraudulent returns introduced at trial, Shabazz's 2009 tax return claimed large car and truck expenses and falsely listed Revco Discount Drug Centers, Inc., as his employer.

         Pennsylvania agents arrested Shabazz and interviewed him twice. Shabazz maintains that he never received a warning and never waived his rights under Miranda v. Arizona, 384 U.S. 436 (1966). But the agents testified that they provided Shabazz with a Miranda warning, though they could not produce a signed waiver form or recording to corroborate their account. According to one of the agents, Shabazz told them during the interviews that he "ran an operation or a company known as Indigent Inmate[], " that "Dion McBride was making him out to be the mastermind of the [tax-fraud] operation, but he wasn't, " and that "there were other people involved in the Pittsburgh area."

         Before trial, Shabazz moved to suppress his post-arrest statements on the ground that the agents failed to provide a Miranda warning. The magistrate judge credited the contrary testimony of the agents, and the district court adopted the magistrate judge's report and recommendation. The district court explained that the two agents "offered consistent, detailed testimony of the events . . ., giving similar accounts of the interviews." In contrast, Shabazz "could not recall how [one] interview concluded and could not even recall meeting with the agents twice." It also explained that "Shabazz ha[d] a prior conviction for fraud, which further call[ed] into question his credibility."

         Shabazz moved to suppress the contents of his wallet on the ground that the search-warrant affidavit for the Dorsey and Cheney Street addresses did not establish probable cause. The magistrate judge concluded that the affidavit was not deficient, and the district court again adopted the magistrate judge's report and recommendation. It explained that Shabazz's argument that the warrants were "based solely upon [statements by] persons with an interest in the case as defendants, e.g. Dion McBride" was unpersuasive because "[t]he affidavit[] also refer[red] to evidence gathered from other sources such as transaction records, phone records, websites[, ] and surveillance." And the affidavit "recite[d] steps that investigators took to corroborate McBride's statements, including contacting a hotel where Shabazz stayed in 2010 and 2011."

          Shabazz also unsuccessfully opposed a pretrial motion by the government to admit fraudulent tax returns that were not alleged in the indictment. The district court ruled that the evidence was admissible under United States v. Ford, 784 F.3d 1386 (11th Cir. 2015). In Ford, we affirmed the admission of evidence of uncharged conduct intrinsic to a tax-fraud scheme. Id. at 1394.

         At trial, the government introduced evidence of Shabazz's involvement in the scheme. It called several victims, and it introduced fraudulent tax returns that were both charged and not charged in the indictment. And the district court admitted, over objection, a set of photographs of Shabazz and Leslie Shabazz with large amounts of cash. After the government explained that the pictures were "relevant to the issue of whether or not [Shabazz] had, in fact, received illicit proceeds, " the district court ruled that "they [were] relevant" and "d[id] tend to prove a fact in dispute." Shabazz also testified and denied any involvement in the fraudulent scheme.

         On the second day of trial, Shabazz objected to wearing his prison clothes. He entered the courtroom in his prison jumpsuit and explained to the district court that he was wearing the jumpsuit because the marshals had not allowed him to take his legal work with him at the end of the previous day of trial. He stated, "I can't take my legal work with me, because I am in jail. So why I come in here and front like I'm not[?]"

          The district court explained to him that it was "[his] choice" "to wear those clothes, " but it reminded him that he did not "have to wear them" and warned him that "it [wa]s a dangerous and mistaken notion to wear them because . . . it sends the wrong signal to the jury." It stated, "There is a reason that criminal defendants are not required to wear prison garb during trials, and it is because, for some people, that will create a presumption of guilt." It also stressed that it did not "mind taking the time for [Shabazz] to put [his] suit on."

         Shabazz declined the opportunity to change his clothes. The district court then stated, "Mr. Shabazz has elected to remain in his orange jumpsuit[, ] which is his right, but I am going to instruct the jury when they come in that they should not infer anything regarding guilt or innocence because of his wearing [it]." Shabazz's counsel did not object.

         Shabazz's counsel expressed concern about the clothing only after the jury entered the room. At a sidebar conference, counsel told the district court, "Well, as the jury walked out, [Shabazz] said he want[ed] to put the suit on." The district court refused to allow Shabazz to change. It explained that "the jury ha[d] already seen him in the orange jumpsuit, and he . . . waived his right when he said no, and [the district court] called the jury back in. He c[ould]n't recall the jury after the jury c[a]me[] in and [change his] mind . . . ." It then gave a limiting instruction as promised.

          At the end of the trial, the district court instructed the jury, over Shabazz's objection, about the rule of conspirator liability established in Pinkerton v. United States, 328 U.S. 640 (1946). And the jury convicted Shabazz of all counts: one count of conspiracy to defraud the government, 15 counts of wire fraud, 15 counts of aggravated identity theft, and two counts of theft of government funds.

         At sentencing, the district court heard arguments about issues related to the calculation of Shabazz's Sentencing Guidelines range. It rejected Shabazz's argument that he did not qualify for a role enhancement because he did not exercise control over other members of the conspiracy. It stated that it could not "say that he did not exercise control over them" and that it "th[ought] he d[id] satisfy the enhancement's definition or description of one as an organizer or leader of criminal activity." It also ruled that the government had "proved at trial sufficiently, beyond a preponderance of the evidence, " that it was appropriate to calculate the intended loss amount by considering tax returns that were filed in the names of Indigent Inmate applicants and listed one of the fifteen common addresses-regardless of whether the evidence established that Shabazz was directly or indirectly connected to the addresses.

         The district court sentenced Shabazz to 277 months of imprisonment, five years of supervised release, a special assessment of $3, 300, and restitution totaling $1, 680, 299. The sentence was below Shabazz's Sentencing Guidelines range, which was 292 to 365 months.

         II. ...

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