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United States v. Whitman

United States Court of Appeals, Eleventh Circuit

April 24, 2018


          Appeals from the United States District Court for the Middle District of Georgia D.C. Docket No. 1:14-cr-00001-WLS-TQL-1

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


         This appeal from convictions of bribery, wire fraud, theft, and obstruction involving government contracts presents two questions: (1) whether the district court abused its discretion when it declined to instruct the jury about the offense of giving illegal gratuities as a lesser-included offense of bribery; and (2) whether the district court clearly erred when it determined that one of the defendants was responsible for the entire loss amount attributable to the criminal scheme. Christopher Whitman, the owner of a trucking company, United Logistics, bribed Shawn McCarty and two other employees of the federal Defense Logistics Agency to steer transportation contracts to and increase the profits of United Logistics. Whitman and McCarty were convicted and sentenced for their roles in committing multiple crimes, including wire fraud and bribery. Whitman argues that the district court abused its discretion when it refused to instruct the jury about giving illegal gratuities as a lesser-included offense of bribery. But the district court did not abuse its discretion because the trial involved no dispute that would have allowed the jury to convict Whitman of the lesser charge while acquitting him of bribery. Whitman argued at trial an exculpatory defense that, if believed, would have required the jury to acquit him of both charges. McCarty argues that the district court erred when it calculated his Sentencing Guidelines range using the total loss amount caused by all four schemers. But a defendant may be held responsible for all losses caused by a jointly undertaken criminal activity, and the district court did not clearly err when it inferred that McCarty agreed to join a scheme involving Whitman and the other two government employees. We affirm Whitman's conviction and McCarty's sentence.

         I. BACKGROUND

         For about four years, Christopher Whitman orchestrated a scheme that defrauded the United States of more than $15 million. In 2008, Whitman founded a trucking company called United Logistics, and he later bribed three employees of the Defense Logistics Agency on a Marine Corps base to use his trucking company to ship military equipment around the country. Whitman bribed Mitch Potts, the office supervisor, Jeffrey Philpot, a transportation assistant, and Shawn McCarty, another transportation assistant.

         Because the Department of Defense hired an outside company, Menlo, to book shipment carriers, the four schemers devised shipment requirements that all but guaranteed that United Logistics would receive assignments. For example, Philpot delayed making requests and required same-day pickups to force Menlo representatives to assign the shipments to a local carrier. A Menlo representative testified that one request gave the company a lead time of ten minutes, "which is virtually impossible" to honor. Philpot also required the use of certain trailers because United Logistics had more of those trailers than any other carrier. He testified that he "couldn't guarantee the business would go [to United Logistics], but it was, you know, most likely."

         Yet Whitman rarely, if ever, satisfied the special requirements the employees imposed. Although Whitman instructed his assistant to accept every request from Menlo, United Logistics owned only two trucks. Whitman would regularly send one of the two trucks to pick up the shipments and transport them back to his yard. His assistant would then hire other trucking companies to handle the shipments without complying with any expedite, special-equipment, or other restrictive requests.

         The four schemers also used tactics to boost the profits of United Logistics. Philpot explained that he "short load[ed]" trucks by "[b]reaking . . . shipment[s] down into . . . smaller shipment[s]" so that the government was forced to "order more trucks than w[ere] actually required." Whitman then reloaded the shipments into fewer trucks once he got them back to his yard and billed the government for more trucks than he actually used. The evidence also established that McCarty once contracted with United Logistics to ship a single pallet of elastic cord from Albany, New York, to Canada for a total cost of more than $12, 000. Because the shipment was designated "exclusive use, " no other cargo could accompany the pallet even though it filled only about one-fiftieth of the space in a single trailer.

         In exchange for steering profitable contracts to United Logistics, Whitman paid the government employees in cash and goods. For example, Whitman paid Potts $5, 000 to $6, 000 in cash-filled envelopes "monthly as long as [they] were doing good work, " gave him gift cards to restaurants, and bought a house from him. Whitman initially paid Philpot "[a]nywhere from $1, 000 up to $5, 000" in cash "[a]t least two or three times a week, " and later wrote checks for "items [Philpot] wanted" because that was "more convenient for him." He also paid a construction company owned by McCarty to make improvements to Philpot's home. And Whitman bought McCarty multiple cars, let McCarty live in one of his houses rent-free for a year and a half, and treated McCarty and Philpot to a bachelor party where he gave each of them money to gamble.

         Although the employees never discussed with each other the specifics of their individual arrangements with Whitman, they knew about the criminal conduct of their colleagues. Whitman told Potts that he "had [McCarty] working for him" and that he was "paying him to get [him] as many loads as possible." Because Philpot was McCarty's supervisor, he frequently reviewed McCarty's work and identified fraudulent activity, like short loading, but failed to take any corrective action. Philpot testified that he "figured [McCarty] was doing pretty much the same thing [he] was doing" and that "[he] did not want to get him in trouble, and [he] didn't want [him]self to get in trouble either."

         In 2012, agents from the Naval Criminal Investigative Service informed Potts and Philpot that they were under criminal investigation because of their relationship with Whitman. The two employees left the military base to meet with each other, and Philpot called McCarty "to give him a heads up." Whitman later joined the meeting and told Philpot and Potts to "make sure [their] phones [we]re clear."

         McCarty, Potts, and Philpot met with each other several times as the investigation progressed to "touch base, [to] see if anybody had heard anything, [and to] try to find out what was going on." At one meeting, Philpot told McCarty that he was planning to meet with investigators to discuss his role in the scheme. McCarty responded that "all they had on him was a four-wheeler and a Mustang, and he wasn't going to prison for that." At another meeting, Whitman advised Potts and Philpot, "[T]he fish that don't open his mouth don't get hooked." Unpersuaded, Potts and Philpot agreed to cooperate with the government.

         At trial, Whitman defended himself by arguing that he was extorted. He contended that "[t]he money he paid was paid because [Potts and Philpot] threatened to blackball him and to eliminate him as a carrier." In his opening statement, Whitman's counsel stated, "[Whitman] didn't have a corrupt intent to bribe. And that is [his] defense." When he cross-examined Philpot, counsel asked if he told investigators that he "threatened Whitman that [he] would turn him off." During his examination of an agent who interviewed Philpot, he asked whether Philpot "disclose[d] that there were instances when Whitman was a little slow in compensating him, " that Philpot "would need to remind Whitman to pay him, " and that he "threatened Whitman that he would, quote, turn him off if Whitman did not continue paying him." And in his closing argument, counsel reiterated that it was his "position" that "Whitman [wa]s the victim of extortion by two clearly corrupt government officials." He stated that "Whitman had to pay to keep doing ...

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