United States District Court, E.D. Tennessee, Northern Division, Knoxville
R. Thapar United States District Judge.
government charges the defendants with, among other things,
wire fraud and conspiracy to commit mail and wire fraud. R.
97 ¶¶ 1-31. The defendants move to dismiss those
charges on due-process grounds, arguing that "they are
based on a [prosecution] theory inconsistent with [the]
prosecutors' theory as to different defendants charged
with the same crime." R. 82 at 1. Because they are not,
the Court will adopt Magistrate Judge Guyton's
recommendation that the motion be denied.
defendants worked sales at Pilot, which operates hundreds of
truck stops across the country. Those hundreds of truck stops
sell billions of gallons of fuel a year. R. 97 ¶ 1. A
truck stop would be of little use if it did not. According to
the indictment,  the defendants tried to leverage trucking
companies' constant need for fuel into more customers for
Pilot, conspiring "to increate Pilot's market share,
" "to maximize Pilot's profit, " "to
maximize" their own commissions, and to “achieve
recognition among each other. Id. ¶ 25. As
stated, there is nothing wrong with those goals. But,
allegedly, there is something wrong with how the defendants
went about achieving them: by “identifying trucking
companies” that were “unlikely to detect”
false promises, “inducing” them to buy their fuel
from Pilot through the promise of discounts, withholding
portions of those discounts, and then covering their tracks
with false explanations. Id. ¶ 26.
defendants apparently had numerous co-conspirators in
Pilot's sales department; the indictment lists seven in
specific. Id. ¶ 12. These seven have also been
indicted- although in separate cases-and have already pled
guilty. Their plea agreements mirror the indictment in this
case, detailing the discount scheme, the withholding, the
false excuses, and so on. As an example, the plea agreement
for Chris Andrews, a Pilot regional sales manager, states
that he “conspired and agreed with other Pilot
employees to commit” mail fraud by “approv[ing]
the sending of fraudulently reduced rebate checks” and
to commit wire fraud by assuring victim customers that they
“were in fact receiving their agreed upon diesel price
discount” when they in fact were not. United States
v. Andrews, 3:13-CR-173, D.E. 13 ¶ 3(1) (E.D.
Tenn.). Andrews took “numerous overt acts” to
further the conspiracy, but the lawyers who negotiated the
plea bargain decided not to kill too many trees; instead they
highlighted two instances: one where Andrews had an underling
explain to a customer via email that Pilot's failure to
give the customer its full rebate was “inadvertent,
” and another where Andrews was required to attend a
“break-out session” with a Pilot sales director
who taught Andrews the tricks of the fraud trade, so to
speak. Id. ¶ 3(m).
these seven other defendants have “acknowledge[d] that
the[ir] sentencing determination will be based upon the
entire scope of the[ir] criminal conduct, ”
id. ¶ 5(c), their pleas did include a carrot.
Normally defendants are sentenced based on the
“reasonably foreseeable” losses that they
“knew” or “should have known” would
result from the offense. U.S.S.G. § 2B1.1 cmt.
n.3(A)(iv). When their offense is a conspiracy, their
sentence will be based on the losses that resulted from the
entire conspiracy, not just their contributions to it.
See id. § 1B1.3(a)(1)(B) (defining
“relevant conduct” as all the reasonably
foreseeable acts of the co-conspirators); United States
v. Bandy, 172 F.3d 49, at *2 (6th Cir. 1999) (table)
(“Pursuant to USSG § 2B1.1, the amount of loss is
determined in accordance with USSG § 1B1.3, the relevant
conduct provision[.]”). But for the seven bargainers,
“the United States will seek to hold [them]
responsible” for a more “limited”
sphere-specifically, those losses in which they personally
had a hand, not “every [loss] caused by the entire
conspiracy.” Andrews, 3:13-CR-173, D.E. 13
¶ 3(n). Likewise, the government will seek to hold them
responsible for only the particular victims whom they
personally duped. Id. ¶ 3(o).
would say those defendants struck a pretty good deal, all
things considered. The defendants here say the deal creates a
due-process violation-not for the plea bargainers, but for
the defendants who have not pled. The Sixth Circuit has
assumed, without deciding, “that the use of
inconsistent theories of prosecution amounts to a denial of
Due Process.” United States v. Gravley, 587 F.
App'x 899, 913 n.8 (6th Cir. 2014). But see id.
(“Whether the use of inconsistent theories of
prosecution amounts to a denial of Due Process has not been
settled.”). The defendants here argue that the
government is guilty of inconsistency by leniency. The
argument runs like this: the “linchpin” of the
government's conspiracy theory “is that all [the
instant] defendants participated with others, including seven
[who have pled], in a single conspiracy”; yet in its
plea agreements with the seven, the government appears to
concedes that their “role in the conspiracy was quite
limited”; and it is “entirely inconsistent”
to say (in an indictment) that a group of Pilot employees
joined in a conspiracy while saying (in plea agreements) that
members of that group joined in a more limited way. R. 82 at
1-2. The defendants in this case therefore moved to dismiss
the parts of the indictment accusing them of wire fraud and
conspiracy to commit wire fraud. Id.; R. 100.
Judge Guyton recommends denying their motion. R. 141. He
gives two grounds: one categorical, the other more
case-specific. First, “an inconsistency between a
defendant's charges in an indictment and the
government's sentencing recommendations with regard to a
coconspirator cannot, ” he concludes,
“constitute a violation of due process.”
Id. at 5 (emphasis added). Second, he concludes
that, at any rate, the government “has not
espoused inconsistent theories of prosecution” here.
Id. (emphasis added). Both grounds are thoroughly
supported and well-reasoned. The defendants object to both.
Court reviews de novo those portions of a magistrate
judge's recommendation to which a defendant objects. Fed.
R. Crim. P. 59(b)(3).
Court will not review more than it needs to. In their first
two objections, the defendants debate the categorical ground,
contending that an inconsistency between a plea agreement and
an indictment can violate due process. R. 150 at 5.
If the government has not pursued inconsistent
theories in these specific cases, however, it has not
violated due process, regardless of whether it could have
done so. The Court will therefore just cut to the chase: Has
the government pursued inconsistent theories of prosecution
against the defendants here and the seven defendants who have
not. As discussed, the government has charged the defendants
in this case with bilking Pilot customers through the promise
of discounts at those customers never enjoyed (or at least,
never fully enjoyed). At the same time, the government has
convinced Andrews, one of their seven alleged
co-conspirators, to plead guilty to the exact same kind
of conduct. See Andrews, 3:13-CR-173, D.E. 13
¶¶ 3(a)-(m). And the other six pleas are just like
his. See United States v. Ralenkotter, 3:13-CR-63,
D.E. 13 ¶¶ 3(a)-(q) (E.D. Tenn.); United States
v. Stinnett, 3:13-CR-68, D.E. 12 ¶¶ 3(a)-(q)
(E.D. Tenn.); United States v. Radford, 3:13-CR-69,
D.E. 7 ¶¶ 3(a)-(m) (E.D. Tenn.); United States
v. Clark, 3:13-CR-70, D.E. 16 ¶¶ 3(a)-(k)
(E.D. Tenn.); United States v. Welch, 3:13-CR-78,
D.E. 12 ¶¶ 3(a)-(1); United States v.
Holden, 3:13-CR-175, D.E. 7 ¶¶ 3(a)-(j) (E.D.
Tenn.). Of course, each agreement contains a slightly
different account of the facts; each conspirator has his own
role to play. But they are all alike in this important way:
They show that the government prosecuted Pilot employees for
the same conspiracy in those cases that it is prosecuting
Pilot employees for here.
true that the government discusses limiting the loss amount
and victim population only in the seven other defendants'
plea agreements, not the instant defendants' indictment.
But that limit stems from a theory of punishment, not a
theory of prosecution. To prosecute is “[t]o institute
and pursue a criminal action against” someone.
Prosecute, Black's Law Dictionary (10th ed.),
Westlaw (database updated 2014). To institute and pursue a
criminal action against someone for mail or wire fraud, the
government must charge-then prove- that he “willfully
participated in a scheme to defraud, ” used the mail or
an interstate wire to carry out that scheme, and
intentionally “deprive[d] a victim of money or
property.” United States v. Rogers, 769 F.3d
372, 376 (6th Cir. 2014) (quoting United States v.
Faulkenberry, 614 F.3d 573, 581 (6th Cir. 2010)). Loss
amounts and numbers of victims have nothing to do with it,
which explains why the government would not spend its time
calculating these numbers in an indictment. To be sure, the
government must calculate those numbers at some
point. But that point comes after it proves its charges. Then
it must recommend a sentence that accords with the Sentencing
Guidelines, and one in particular: Guideline 2B1.1, under
which a sentence must account for the loss amount and number
might argue that a prosecutor's job does not stop until a
defendant is behind bars, that “prosecution” thus
extends through sentencing, and that theories of punishment
are also theories of prosecution. An interesting semantic
argument, but not one that needs addressing here. The courts
that control this one have only gone so far as to hold-and
many times they have merely assumed-that inconsistent
prosecution theories imperil due process when the government
uses them to convict. See Berger v. United
States, 295 U.S. 78, 88 (1935) (“It is as much
[the prosecutor's] duty to refrain from improper methods
calculated to produce a wrongful conviction as it is
to use every legitimate means to bring about a just
one.”) (emphasis added); see also Bradshaw v.
Stumpf, 545 U.S. 175, 186-87 (2005) (finding no
“prosecutorial inconsistencies, ” where the
government accused two men of a shooting, since “the
precise identity of the triggerman was immaterial to [the
defendant's] conviction for aggravated
murder” (emphasis added)); United States v.
Collins, 799 F.3d 554, 582 (6th Cir. 2015) (finding no
“inconsistent criminal theories” and no
due-process violation (emphasis added)); Coley ...