United States District Court, E.D. Michigan, Northern Division
ORDER DENYING DEFENDANTS' MOTIONS FOR JUDGMENT OF
ACQUITTAL AND NEW TRIAL
L. LUDINGTON UNITED STATES DISTRICT JUDGE.
McQuarrie was indicted on June 13, 2016, with six counts
alleging that he made false statements and converted
collateral pledged for a loan he received from the Farm
Service Agency (FSA). ECF No. 1. On June 8, 2017, a
superseding indictment was returned which charged Scott
McQuarrie with twelve counts and which named his parents,
David Allen McQuarrie and Yvonne Evelyn McQuarrie, as
co-Defendants in two counts. On November 1, 2017, a second
superseding indictment was issued which charged the three
Defendants with an additional two counts, for a total of
fourteen counts. ECF No. 42. On January 10, 2018, and
February 14, 2018, third and fourth superseding indictments
were issued. ECF No. 76, 103. A trial on the fourth
superseding indictment was held in late March of 2018.
days before jury selection occurred, Scott McQuarrie filed a
motion to dismiss Count Four of the fourth superseding
indictment. ECF No. 130. Given the temporal proximity between
the filing of the motion to dismiss and the beginning of
trial, Count Four was severed. The jury acquitted Scott
McQuarrie of Count Nine and convicted him of the remaining
counts, leaving Count Four as the only unresolved count. ECF
No. 148. David and Yvonne McQuarrie were each
convicted of Counts Eleven, Twelve, and Fourteen, but
acquitted of Count Thirteen. ECF No. 150, 152.
April 11, 2018, Defendants David and Yvonne McQuarrie filed
two joint motions. In the first, David and Yvonne McQuarrie
move for a judgment of acquittal. ECF No. 166. In the second,
they request a new trial. ECF No. 167. On the same day,
Defendant Scott McQuarrie filed a motion for acquittal and a
new trial. ECF No. 168. For the following reasons, all three
motions will be denied.
motions are governed by Federal Rules of Criminal Procedure
29 and 33. Rule 29(c) permits a criminal defendant to move
for a judgment of acquittal within four days after a guilty
verdict has been rendered. If the court determines pursuant
to its own review of the evidence that “the evidence is
insufficient to sustain a conviction, ” the court must
enter a judgment of acquittal. Rule 29(a). This review of the
sufficiency of the evidence is extremely favorable to the
prosecution. “[T]he relevant question is 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.” Jackson v. Virginia, 443 U.S. 307, 319
(1979) (emphasis in original). In reviewing the jury's
verdict, “both circumstantial and direct
evidence” must be viewed “in a light most
favorable to the prosecution.” United States v.
Humphrey, 279 F.3d 372, 378 (6th Cir. 2002).
“Circumstantial evidence alone, if ‘substantial
and competent,' may support a verdict and need not
‘remove every reasonable hypothesis except that of
guilt.'” United States v. Keeton, 101 F.3d
48, 52 (6th Cir. 1996). “The government is entitled to
the benefit of all reasonable inferences that can be drawn
from the evidence.” United States v.
Hofstatter, 8 F.3d 316, 324 (6th Cir. 1993).
to Rule 33(a), “[u]pon the defendant's motion, the
court may vacate any judgment and grant a new trial if the
interest of justice so requires.” Such a motion may be
granted if “the jury's verdict was against the
manifest weight of the evidence.” United States v.
Hughes, 505 F.3d 578, 592 (6th Cir. 2007). But
“such motions are granted only ‘in the
extraordinary circumstance where the evidence preponderates
heavily against the verdict.'” Id. at 592
(quoting United States v. Turner, 490 F.Supp. 583,
593 (E.D.Mich.1979)). In seeking a new trial based on the
district court's refusal to sever defendants and/or
counts for trial, the “defendant must show compelling,
specific, and actual prejudice from a court's refusal to
grant the motion to sever.” United States v.
Saadey, 393 F.3d 669, 678 (6th Cir. 2005).
can also seek a new trial by arguing that they were convicted
pursuant to a duplicitous indictment. See United States
v. Kakos, 483 F.3d 441, 444 (6th Cir. 2007). “An
indictment is duplicitous if it sets forth separate and
distinct crimes in one count.” United States v.
Davis, 306 F.3d 398, 415 (6th Cir. 2002). Duplicitous
indictments are problematic because they permit a jury to
“‘find a defendant guilty on the count without
having reached a unanimous verdict on the commission of any
particular offense.'” United States v. Shumpert
Hood, 210 F.3d 660, 662-63 (6th Cir. 2000) (quoting
United States v. Robinson, 651 F.2d 1188, 1194 (6th
Cir.1981)). “Duplicitous charges, however, are not
necessarily fatal to an indictment.” Id. at
662. If the issue is not raised before trial, then the
inquiry focuses on “the harm stemming from the
duplicitous indictment.” Kakos, 483 F.3d at
all three motions raise similar arguments, Defendants'
motions will be considered and addressed simultaneously. The
initial question is whether the evidence admitted at trial
was sufficient for any rational trier of fact to convict. The
next issue is whether certain evidentiary rulings made during
trial necessitate acquittal or a new trial. The third
question is whether David and Yvonne McQuarrie suffered
specific and compelling prejudice because their motion for
severance was denied. The fourth issue is whether the
evidence the Government relied upon at trial for the mail and
wire fraud counts constituted a variance from the indictment
and bill of particulars and, relatedly, whether mail and wire
fraud charges in the fourth superseding indictment were
duplicitous. The final question is whether the Government
committed misconduct during its closing statements.
considering the evidence in a light most favorable to the
prosecution, there is ample factual support for the
regards the Counts of the fourth superseding indictment which
charge Scott McQuarrie with conversion, Scott McQuarrie
argues that he should be acquitted because “it is
axiomatic that one cannot convert that which they do not
own.” Scott McQuarrie Mot. at 2, ECF No. 168. He
identifies no legal support for this assertion. And there was
certainly no evidentiary support for the proposition that
Scott McQuarrie did not own the collateral, much less that he
disclosed that to the FSA. To the contrary, Scott McQuarrie
met with Appraiser Jerry Rosenquist on December 28, 2009, to
update the value of the property he was pledging for his
restructured loan and represented that it was his. Gov. Ex.
2. (“In accordance with your request of December 17
2009, I have completed an appraisal of the livestock and farm
equipment in the ownership and possession of Scott McQuarrie,
located at 9871 Spruce RD., Ossineke, MI 49766.”).
Similarly, Scott McQuarrie expressly represented his
ownership of the collateral to FSA in the security agreement
executed on July 20, 2011. Gov. Ex. 5 (“3. DEBTOR
WARRANTS, COVENANTS, AND AGREES THAT: (a) Debtor is the
absolute and exclusive owner of the above-described
collateral . . . (e) Debtor will immediately notify Security
Party of any material change in the collateral or in the
collateral's location. . . .”).
the plain language of 18 U.S.C. § 658 does not require
as an element of the crime that the defendant own the pledged
collateral. See Id. (“Whoever with intent to
defraud, knowingly conceals, removes, disposes of, or
converts to his own use or to that of another, any
property mortgaged or pledged to, or held by, the Farm
Credit Administration . . . .”) (emphasis added). And
the definition of conversion provides no support for Scott
McQuarrie's argument. According to Black's,
conversion involves an individual “depriv[ing] another
of his property.” Black's Law Dictionary,
Conversion, (10th ed. 2014) (explaining that a
person can convert another's property in several ways:
“(1) by wrongly taking it, (2) by wrongly detaining it,
and (3) by wrongly disposing of it”). The conduct which
Congress criminalized in § 658 is depriving the FSA of
the security it enjoys through its interest in the pledged
collateral. The FSA can be deprived of that interest by any
person who converts the pledged collateral, regardless of
whether that individual owns the collateral. And, of course,
Scott McQuarrie actually did represent that he owned the
McQuarrie also argues that the “FSA waived their
security agreement to allow Defendant to sell his livestock,
crops and trade-up farm equipment, ” and so FSA lost
any property interest it may have had. Scott McQuarrie
provides no legal support for this contention, and it is
inconsistent with the plain language of 18 U.S.C. § 658.
Again, Scott McQuarrie identifies no evidentiary support for
this proposition. Although Scott McQuarrie advanced the
argument to the jury, it was rejected.
this theory is legally insufficient to operate as a defense.
Section 658 criminalizes the following behavior:
“Whoever with intent to defraud, knowingly conceals,
removes, disposes of, or converts to his own use or to that
of another, any property mortgaged or pledged to, or held by,
the Farm Credit Administration . . . .” Id.
There is no textual support for Scott McQuarrie's
argument that conversion is noncriminal if the FSA was less
than diligent in protecting its rights. Federal courts have
repeatedly rejected this theory of defense as legally
irrelevant. See United States v. Lott, 751 F.2d 717,
719 (4th Cir. 1985) (finding that there was sufficient
evidence of intent to defraud “even if the FHA did lead
Lott to believe that it knew of the advance and implicitly
acquiesced in his retaining the funds”); United
States v. Mitchell, 666 F.2d 1385, 1388 (11th Cir. 1982)
(“The $15, 000 advance constituted proceeds from crops
and Mitchell's intentional application of that sum to his
land rental payment is not excused by the understandable
desire to maintain his farm as an ongoing operation.”);
United States v. Berman, 21 F.3d 753, 755 (7th Cir.
1994); United States v. Gilbert, 69 F.3d 538 (6th
Cir. 1995) (citing Lott approvingly). The evidence
admitted at trial was more than sufficient to permit the jury
to conclude that Scott McQuarrie sold livestock, crops, and
equipment which had been pledged as collateral to the FSA
with intent to defraud.
McQuarrie does not expressly challenge the sufficiency of the
evidence regarding the bankruptcy fraud convictions (Counts
Eleven and Twelve). He does challenge several evidentiary
rulings made during trial and argues that those rulings
prevented him from advancing his preferred defense. Those
evidentiary challenges will be addressed below. Yvonne and
David McQuarrie, however, argue that there was insufficient
evidence for the jury to conclude that “David or Yvonne
knew that Scott was withholding any information from the
bankruptcy court” and so insufficient evidence to
conclude that they acted with intent to defraud. ECF No. 166
and Yvonne admit that
a rational juror could find that Scott McQuarrie sold assets
that were concealed from the bankruptcy court, that David
McQuarrie assisted in the sale of some of these assets, and
that money was placed in the financial accounts of David and
Yvonne McQuarrie. Additionally, it is undisputed that David
and Yvonne McQuarrie were aware of the bankruptcy filings of
Def. Mot. Acquittal at 4, ECF No. 166.
these admissions (which could not reasonably be disputed
given the evidence admitted at trial, see Gov. Resp.
Br. at 4-5, ECF No. 178), Defendants' challenge to their
conviction collapses. Defendants' only proffered
explanation for why proceeds from the sale of Scott's
assets were deposited in his parent's accounts is that he
had long been in debt to them, in addition to the FSA. Even
if true, that dynamic could not operate as a defense.
Defendants have never identified any documents formalizing
any loans, much less a security agreement. As such, David and
Yvonne would have known (especially given their knowledge of
Scott's first bankruptcy filing) that other creditors had
superior interests to Scott's assets which were being
sold and the proceeds which were being deposited in their
accounts. Accordingly, a reasonable jury could have concluded
that David and Yvonne cooperated with their son to conceal
assets with the intent to defraud the bankruptcy court.
Indeed, a reasonable jury could have viewed Defendants'
arguments regarding Scott McQuarrie's debts to his
parents as providing a motive for David and Yvonne to conceal
Scott McQuarrie's assets from the bankruptcy court-that
is, to recover their losses at the expense of Scott
McQuarrie's other creditors.
the mail fraud and wire fraud convictions (Counts Thirteen
and Fourteen), all three Defendants argue that the
Government failed to identify evidence that the
jurisdictional element (an interstate use of a wire or mail
communication) was met. The elements of mail fraud and wire
fraud are as follows: “(1) devising or intending to
devise a scheme to defraud (or to perform specified
fraudulent acts); (2) involving a use of the mails or wires;
and (3) for the purpose of executing the scheme or attempting
to do so. United States v. Kennedy, 714 F.3d 951,
958 (6th Cir. 2013) (quoting United States v. Frost,
125 F.3d 346, 354 (6th Cir.1997)). The Sixth ...