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United States v. Parnell

United States District Court, M.D. Georgia, Albany Division

May 28, 2015

UNITED STATES OF AMERICA,
v.
STEWART PARNELL, MICHAEL PARNELL, and MARY WILKERSON, Defendants.

ORDER

W. LOUIS SANDS, Sr., District Judge.

Pending before the Court are Defendant Stewart Parnell's Motion for Judgment of Acquittal, Motion for Dismissal or, in the Alternative, Motion for New Trial (Doc. 326), Defendant Michael Parnell's Motion for Judgment of Acquittal, as amended (Docs. 313 & 353), Defendant Mary Wilkerson's Motion for Judgment of Acquittal, as amended (Docs. 306, 325 & 382), Defendant Mary Wilkerson's Motion for New Trial (Docs. 339), Defendant Mary Wilkerson's Motion to Dismiss the Indictment on Count 73 or, in the Alternative, Motion for a New Trial (Doc. 387), Defendant Mary Wilkerson's Motion for Authorization for Payment (Doc. 396), and the Defendants' Joint Motion for New Trial, as amended (Docs. 308, 319, 328, 350, 353 & 362). For the reasons that follow, those Motions, as amended ( See Docs. 306, 308, 313, 319, 325, 326, 328, 339, 350, 353, 362, 382, 387 & 396) are DENIED.

I. Motions for Judgment of Acquittal

Under Federal Rule of Criminal Procedure 29, a defendant's motion for judgment of acquittal should be granted if the Court finds that "the evidence is insufficient to sustain a conviction." Fed. R. Crim. P. 29(a). Thus, the Court "must determine whether a reasonable jury could have found the defendant guilty beyond a reasonable doubt." United States v. Mercer, 541 F.3d 1070, 1074 (11th Cir. 2008) (citing United States v. Ward, 197 F.3d 1076, 1079 (11th Cir. 1999)). The conviction must be upheld unless the Court finds that "the jury could not have found the defendant guilty under any reasonable construction of the evidence." United States v. Jimenez, 705 F.3d 1305, 1308 (11th Cir. 2013) (citing United States v. Merrill, 513 F.3d 1293, 1299 (11th Cir. 2008)).

In construing the evidence, the Court must take the evidence in the light most favorable to the Government. United States v. Maxwell, 579 F.3d 1282, 1299 (11th Cir. 2009) (citing United States v. Futrell, 209 F.3d 1286, 1288 (11th Cir. 2000)). Accordingly, the Court must "resolve any conflicts in favor of the Government, draw all reasonable inferences that tend to support the prosecution's case, and assume that the jury made all credibility choices in support of the verdict." Id. (citing United States v. Thompson, 473 F.3d 1137, 1142 (11th Cir. 2006) and Ward, 197 F.3d at 1079). "The prosecution need not rebut all reasonable hypotheses other than guilt." United States v. Sellers, 871 F.2d 1019, 1021 (11th Cir. 1989) (citing United States v. Bell, 678 F.2d 547, 549 (5th Cir. 1982)). Thus, "[i]t is not enough for a defendant to put forth a reasonable hypothesis of innocence, because the issue is not whether a jury reasonably could have acquitted but whether it reasonably could have found guilt beyond a reasonable doubt." Thompson, 473 F.3d at 1142 (citing United States v. Mieres-Borges, 919 F.2d 652, 656 (11th Cir. 1990)). If, as it did here, the Court reserves decision on the motion made at the close of the Government's evidence, the Court "must decide the motion on the basis of the evidence at the time the ruling was reserved." Fed. R. Crim. P. 29(b).

In this case, the Indictment charged Defendants Stewart and Michael Parnell with Conspiracy to Commit Mail and Wire Fraud in violation of 18 U.S.C. § 1349 i/c/w 18 U.S.C. §§ 1341 & 1343, Conspiracy to Introduce and Deliver for Introduction into Interstate Commerce with Intent to Defraud or Mislead Adulterated and Misbranded Food in violation of 18 U.S.C. § 371 i/c/w 21 U.S.C. §§ 331(a) & 333(a)(2), Introduction of Adulterated and Misbranded Food into Interstate Commerce with Intent to Defraud or Mislead in violation of 21 U.S.C. §§ 331(a) & 333(a)(2), Mail Fraud in violation of 18 U.S.C. § 1341, and Wire Fraud in violation of 18 U.S.C. § 1343. ( See Doc. 1 at 14-15, 23, 40-48.) Also, the Indictment charged Stewart Parnell and Defendant Mary Wilkerson with obstruction of justice in violation of 18 U.S.C. § 1505. ( See id. at 49-50.)

"To sustain [a] conspiracy conviction under 18 U.S.C. § 1349, the government must prove that (1) a conspiracy existed; (2) the defendant knew of it; and (3) the defendant knowingly and voluntarily joined it." United States v. Moran, 778 F.3d 942, 960 (11th Cir. 2015) (citing United States v. Vernon, 723 F.3d 1234, 1273 (11th Cir. 2013)). The Indictment alleged that the substantive offenses underlying the § 1349 conspiracy charge were mail and wire fraud. ( See Doc. 1 at 14.) "Aside from the means by which a fraud is effectuated, the elements of mail fraud, 18 U.S.C. § 1341, and wire fraud, 18 U.S.C. § 1343, are identical." United States v. Ward, 486 F.3d 1212, 1221-22 (11th Cir. 2012) (citing Beck v. Prupis, 162 F.3d 1090, 1095 & n.9 (11th Cir. 1998)). "Both offenses require that a person (1) intentionally participates in a scheme or artifice to defraud another of money or property, and (2) uses or causes the use of the mails or wires for the purpose of executing the scheme or artifice." Id. at 1222 (citing United States v. Hewes, 729 F.2d 1302, 1320 (11th Cir. 1984), and United States v. Hasson, 333 F.3d 1264, 1270 (11th Cir. 2003)). "A scheme to defraud requires proof of material misrepresentations, or the omission or concealment of material facts reasonably calculated to deceive persons of ordinary prudence." Hasson, 333 F.3d at 1270-71 (citations omitted). "Proof of specific intent to use the mails or wire[s] is not required to show conspiracy to commit mail or wire fraud[, only that the defendants] agreed to engage in a scheme to de-fraud in which they contemplated that the mails [or wires] would likely be used." United States v. Ross, 131 F.3d 970, 981 (11th Cir. 1997) (citing United States v. Massey, 827 F.2d 995, 1001-02 (5th Cir. 1987)).

"The elements of a conspiracy under 18 U.S.C. § 371 are (1) an agreement among two or more persons to achieve an unlawful objective; (2) knowing and voluntary participation in the agreement; and (3) an overt act by a conspirator in furtherance of the agreement." Hasson, 333 F.3d at 1270 (citing United States v. Adkinson, 158 F.3d 1147, 1153 (11th Cir. 1998)). The Indictment alleged that violations of 21 U.S.C. §§ 331(a) and 333(a)(2) are the substantive offenses underlying the § 371 conspiracy charge. (Doc. 1 at 23.) Under Title 21, United States Code, Sections 331(a) and 333(a)(2), it is illegal to "introduc[e] or deliver[ ] for introduction into interstate commerce... any food... that is adulterated or misbranded" "with the intent to defraud or mislead." A food is adulterated "[i]f it bears or contains any poisonous or deleterious substance which may render it injurious to health." 21 U.S.C. § 342(a)(1). A food is misbranded if "its labeling is false or misleading in any particular." Id. § 343(a)(1).

The elements of obstruction of justice under 18 U.S.C. § 1505 are (1) a proceeding was pending before a department or agency of the United States; (2) the defendant was aware of the pending proceeding; and (3) the defendant "intentionally endeavored corruptly to influence, obstruct or impede the pending proceeding." United States v. Price, 951 F.2d 1028, 1031 (9th Cir. 1991) (citations omitted). "The term corruptly' means acting with an improper purpose, personally or by influencing another, including making a false or misleading statement, or withholding, concealing, altering, or destroying a document or other information.'" United States v. Taohim, 529 F.Appx. 969, 972 (11th Cir. 2013) (citing 18 U.S.C. § 1515(b)).

A. Stewart Parnell's Motion for Judgment of Acquittal

Stewart Parnell was indicted on one count of conspiracy in violation of 18 U.S.C. § 1349 i/c/w 18 U.S.C. §§ 1341 & 1343, one count of conspiracy in violation of 18 U.S.C. § 371 i/c/w 21 U.S.C. §§ 331(a) & 333(a)(2), twenty counts of introduction of adulterated food into interstate commerce with intent to defraud or mislead in violation of 21 U.S.C. §§ 331(a) & 333(a)(2), thirteen counts of introduction of misbranded food into interstate commerce with intent to defraud or mislead in violation of 21 U.S.C. §§ 331(a) & 333(a)(2), twenty counts of mail fraud in violation of 18 U.S.C. § 1341, eleven counts of wire fraud in violation of 18 U.S.C. § 1343, and two counts of obstruction of justice in violation of 18 U.S.C. § 1505. ( See Doc. 1.) More simply, Stewart Parnell was indicted for mail fraud and wire fraud, conspiracy to commit those crimes under § 1349; introduction of adulterated and misbranded food into interstate commerce with intent to defraud or mislead, and conspiracy to commit those crimes under § 371; and obstruction of justice. Stewart Parnell was convicted by jury on all counts as alleged in the Indictment. ( See Doc. 285.)

Stewart Parnell contends that the evidence introduced against him at trial was insufficient to sustain a conviction for any charge. (Doc. 326 at 1.) Stewart Parnell argues that the evidence demonstrated that "he had a good faith belief that retesting was a legitimate process and he believed the Operation Manager at the Blakely[, Georgia, ] plant was properly following protocol." ( Id. ) Stewart Parnell states that "[t]he only direct evidence of [his] participation in any criminal activity was Mr. Kilgore's testimony regarding [his] knowledge of the Kellogg's scheme." ( Id. ) According to Stewart Parnell, because Kilgore's testimony "was impeached through cross-examination, " such testimony "should be ignored." ( Id. at 1-2.)

As stated above, the Court must "resolve any conflicts in favor of the Government, draw all reasonable inferences that tend to support the prosecution's case, and assume that the jury made all credibility choices in support of the verdict." Maxwell, 579 F.3d at 1299. The question confronting the Court is not whether the evidence introduced at trial would have supported an acquittal. Thompson, 473 F.3d at 1142. The Court finds that the evidence at trial amply supports Stewart Parnell's conviction for the § 1349 conspiracy charge. Samuel Lightsey and Daniel Kilgore testified as to Stewart Parnell's participation with other individuals to falsify and mail COAs to customers in other states for the purpose of creating the belief in those persons that the information contained in those COAs was truthful. Stewart Parnell also participated with others to ship peanut products to customers in other states while contemporaneously making misrepresentations calculated to ensure those persons had no knowledge that the peanut products were not tested for salmonella, had tested positive for salmonella, or were otherwise not what they purported to be. Numerous emails were introduced at trial that served as evidence that Stewart Parnell provided customers with peanut products not allowed by Peanut Corporation of America's ("PCA") contracts. For instance, one email from Stewart Parnell indicated that he purchased Mexican peanut paste, relabeled the paste to lead customers to falsely believe the paste was made at the PCA facility in Blakely, and shipped the paste to those customers. Because Stewart Parnell knowingly, intentionally, and personally participated in and caused others to participate in those activities, the Court also finds that the evidence supports Stewart Parnell's convictions for the substantive offenses of mail and wire fraud.

Next, the Court finds that the evidence introduced at trial supports Stewart Parnell's conviction for the § 371 conspiracy charge. Lightsey and Kilgore testified that Stewart Parnell personally participated in-person and via email with other persons to ship peanut products contaminated with salmonella and stored in insanitary conditions from the PCA facility in Blakely to customers throughout the United States. Stewart Parnell and other conspirators would ship peanut products before receiving salmonella test results, or after receiving positive test results for salmonella, and would falsify documentation purportedly from a laboratory for the purpose of falsely indicating to customers that the test results for salmonella were negative. In addition to the referenced testimony, the Government introduced a large volume of email communications to and from Stewart Parnell that indicated his personal participation in the above-described conspiracy. Specifically, many emails sent from Stewart arnell directed other individuals to ship products he knew to be contaminated with salmonella or knew to have been stored in insanitary conditions. Because Stewart Parnell knowingly, intentionally, and personally participated in and caused others to participate in those activities, the Court finds that the evidence supports Stewart Parnell's convictions for the substantive offenses of introduction of misbranded and adulterated food into interstate commerce with the intent to defraud or mislead.

The Court notes that Stewart Parnell did not challenge the sufficiency of the evidence supporting his convictions for obstruction of justice. Nonetheless, the Court finds that the evidence at trial amply supports Stewart Parnell's convictions for obstruction of justice. At trial, Janet Gray testified, and several audio recordings demonstrated, that Stewart Parnell told FDA investigators that he had no knowledge of positive test results for salmonella on any peanut products produced at the PCA Blakely facility. Emails introduced at trial demonstrated that, at the time the referenced statements were made, Stewart Parnell had knowledge that numerous lots of peanut paste tested positive or presumptively positive for salmonella.

For the reasons stated above, the Court finds that sufficient evidence, as the record stood at the conclusion of the Government's case, supports Stewart Parnell's convictions. As such, Stewart Parnell's Motion for Judgment of Acquittal (Doc. 326) is DENIED.

B. Michael Parnell's Motion for Judgment of Acquittal

Michael Parnell was indicted on one count of conspiracy in violation of 18 U.S.C. § 1349 i/c/w 18 U.S.C. §§ 1341 & 1343, one count of conspiracy in violation of 18 U.S.C. § 371 i/c/w 21 U.S.C. §§ 331(a) & 333(a)(2), twelve counts of introduction of adulterated food into interstate commerce with intent to defraud or mislead in violation of 21 U.S.C. §§ 331(a) & 333(a)(2), twelve counts of introduction of misbranded food into interstate commerce with intent to defraud or mislead in violation of 21 U.S.C. §§ 331(a) & 333(a)(2), twelve counts of mail fraud in violation of 18 U.S.C. § 1341, and five counts of wire fraud in violation of 18 U.S.C. § 1343. ( See Doc. 1.) More simply, Michael Parnell was indicted for mail fraud and wire fraud, conspiracy to commit those crimes under § 1349; and introduction of adulterated and misbranded food into interstate commerce with intent to defraud or mislead, and conspiracy to commit those crimes under § 371. Michael Parnell was convicted on all counts except introduction of adulterated food into interstate commerce with intent to defraud or mislead. ( See Doc. 285.)

Michael Parnell now argues that he is entitled to judgment of acquittal because the evidence was insufficient to establish that he "knew of or intended to ship misbranded food or participated in a conspiracy or fraudulent scheme to do so." (Doc. 313 at 2.) Also, Michael Parnell asserts that the verdict is inconsistent because the jury found him guilty of shipping misbranded food, but not guilty of shipping adulterated food. ( Id. )

The Court finds that the evidence at trial amply supports Michael Parnell's convictions for the § 1349 conspiracy charge described above. Kilgore testified that Michael Parnell participated in a meeting whereby a decision was made to use negative test results obtained on certain lots of peanut paste and use those results for subsequent lots that tested positive for salmonella or were not tested at all. Kilgore also testified that Michael Parnell would personally falsify COAs and send them to Kellogg's for the purpose of creating the false belief in employees of Kellogg's that the products they were receiving from PCA were confirmed to be free of salmonella. Lightsey testified that he informed Michael Parnell of the referenced scheme and Michael Parnell admitted his knowledge of the scheme. At that time, Michael Parnell told Lightsey that he would ensure that Kellogg's did not discover the scheme. Several individuals testified that Michael Parnell was intimately involved with the operation of PCA, the production of peanut paste, the falsification of COAs, and making representations to customers, especially Kellogg's, regarding the production and testing processes of peanut paste. Further, the Government introduced numerous emails from and to Michael Parnell that indicated his knowledge of the referenced scheme, and his intent to hide the purpose of the scheme from PCA's customers. Because Michael Parnell knowingly, intentionally, and personally participated in and caused others to participate in, those activities the Court also finds that the evidence supports Michael Parnell's convictions for the substantive offenses of mail and wire fraud.

Next, the Court finds that the evidence introduced at trial supports Michael Parnell's conviction for the § 371 conspiracy charge described above. Michael Parnell stated to customers that the peanut paste was free of salmonella and that such was confirmed by laboratory testing. Many emails introduced at trial indicate Michael Parnell's knowledge that some peanut products he shipped or caused to be shipped had not been tested for salmonella. The COAs Michael Parnell created and shipped indicated otherwise. Because Michael Parnell knowingly, intentionally, and personally participated in, and caused others to participate in, those activities, the Court also finds that the evidence supports Michael Parnell's convictions for the substantive offense of introduction of misbranded food into interstate commerce with the intent to defraud or mislead.

The Court notes that Michael Parnell cannot challenge his convictions based on an allegedly inconsistent verdict. See United States v. Powell, 469 U.S. 57, 58-59, 69 (1984). Further, if the Court could consider whether the findings made by the jury were consistent, the Court could nonetheless conclude that the jury's verdict was consistent. The jury acquitted Michael Parnell on all counts involving adulterated food, but convicted him on all counts involving misbranded food. The evidence at trial indicated that Michael Parnell was much more involved with falsifying COAs than directing individuals to ship products he knew to be contaminated with salmonella. As such, the jury could have concluded that Michael Parnell was not guilty of activities involving adulterated food, but was guilty of activities involving misbranded food. In other words, the jury's verdict conceivably rested upon factual findings, not upon a mistaken understanding of the law.

For the reasons stated above, the Court finds that sufficient evidence, as the record stood at the conclusion of the Government's case, supports Michael Parnell's convictions. As such, Michael Parnell's Motion for Judgment of Acquittal (Doc. 313) is DENIED.

C. Wilkerson's Motion for Judgment of Acquittal

Although Wilkerson was indicted on two counts of obstruction of justice in violation of Title 18, United States Code, Section 1505, she was convicted of only one charge, Count 73. ( See Doc. 285 at 57.) Count 73, as alleged in the Indictment, charged as follows:

After S. Parnell told the inspector that if any samples had come up positive, Wilkerson would know, but he has no knowledge of any, the FDA Inspector asked Wilkerson if she has any knowledge of any positives. Wilkerson said to the FDA Inspector that earlier in the year she was not working in QA and that she was not aware of any positives.

(Doc. 1 at 50.) The crime of obstruction of justice is committed by any person

[w]hoever corruptly... obstructs, or impedes... the due and proper administration of the law under which any pending proceeding is being had before any department or agency of the United States.

18 U.S.C. § 1505. Wilkerson asserts that she is entitled to judgment of acquittal because the evidence against her as to obstruction was insufficient and the Indictment was "flawed." ( See Docs. 306 & 325 at 2-4.) Also, Wilkerson argues that she is entitled to such relief because FDA Inspector Janet Gray did not document or record her interview or interrogation of Wilkerson. (Doc. 306 at 3.)

According to Gray's testimony at trial, while conducting an investigation of a salmonella outbreak believed to be associated with peanut butter originating from the PCA Blakely facility, Stewart Parnell told her that Wilkerson would know if any presumptive positive test results for salmonella were generated for peanut products produced by the referenced facility. Gray testified that when asked in January 2009, Wilkerson told her that she was unaware of any presumptive positive results for salmonella. However, in an email sent by Wilkerson in June 2008, introduced into evidence as Exhibit 40-01, Wilkerson stated that "we have a problem with... salmonella at least ...


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