Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States v. Carty

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

May 25, 2018

UNITED STATES OF AMERICA,
v.
DAVE CARTY, et al., Defendants.

          ORDER

          MARC T. TREADWELL, UNITED STATES DISTRICT COURT.

         The Government has noticed its intent to use evidence pursuant to Federal Rule of Evidence 404(b). Docs. 49; 50; 51; 52; 53; 54. In briefs and during a hearing, the parties have agreed that most of the Government's notices do not implicate Rule 404(b) evidence because the noticed evidence is not extrinsic. See generally Docs. 61; 62; 63. Only the evidence discussed below, which involves an unrelated transaction and bribes paid to facilitate that transaction, is extrinsic evidence potentially admissible under Rule 404(b). Based on the Government's proffer, the Government has not established that this extrinsic evidence is admissible.

         I. BACKGROUND

         The charges against Defendants Dave Carty, Isaac J. Culver III, and Progressive Consulting Technologies, Inc. arise from a contractual relationship between the Defendants' company, Progressive Consulting Technologies, Inc., and the Bibb County School District. See generally Doc. 1. According to the Government, the School District retained Progressive as its project manager to oversee a multi-million dollar technology upgrade for the School District.[1] In that role, Progressive was to represent the School District's interests in relationships with various vendors of products and services. As the project manager, Progressive-and hence the Defendants-were contractually barred from providing those products and services. Yet, according to the Government, the Defendants promptly moved to deceive the School District through various schemes intended to mask the fact that the Defendants, rather than independent contractors vetted by Progressive, were providing products and services. The charged offenses arise from only one of these deceptions, the purchase of 15, 000 computer terminals (the “computer hardware transaction”).

         According to the Government, that scheme worked like this. The Defendants induced CompTech Computer Technologies, Inc., with whom the Defendants had previous relationships, to act as a “pass through” for the computer hardware project. The Defendants provided CompTech with the details of a proposal to the School District to sell and install the computer terminals for the total amount of $3, 768, 000.00. The Defendants instructed CompTech to use this information to prepare an invoice on CompTech's letterhead. The Defendants then told CompTech to submit the false invoice to the School District. As far as the School District knew, the Defendants, as the School District's representative, had negotiated an arm's-length agreement with CompTech that protected the School District's interests, that is, that the School District was getting the products and services it needed at a fair price. An example of the Defendants' deceptive tactics is found in a concocted email Culver purportedly sent to CompTech thanking CompTech for “‘agreeing to lower CompTech's profit margins on the sales of equipment to the school system.'” Doc. 1 at 10. All of this was done to conceal from the School District that Progressive was the actual vendor for the computer hardware project and that the Defendants intended to profit mightily, at the School District's expense, in the transaction.

         According to the Government, the scheme worked perfectly, at least initially. The Defendants vouched for the false CompTech invoice and the School District wired $3, 768, 000.00 to CompTech. CompTech then sent $3, 689, 740.00 to Progressive. CompTech retained $78, 260.00 for itself, apparently for its services as the pass-through agent and to pay what CompTech thought was a General Services Administration fee owed because CompTech had put its GSA credentials on the false invoice. Progressive then purchased the computer terminals for $1, 749, 000.00. The computer terminals were shipped to the School District, but they lacked key components, and of the 15, 000 terminals delivered, only 300 were ever installed. The remaining terminals sit in a warehouse because the School District found them “unusable as the key components were not purchased.” Id. at 13. In short, the School District “paid $3, 768, 000.00 for goods and services for which [Defendants] paid only $1, 749, 000.00” and the School District got, essentially, nothing. Id.

         Again, this is the only transaction for which the Defendants have been indicted. The Government wants to introduce, pursuant to Rule 404(b), evidence of another transaction, a transaction that is the subject of a separate indictment against other defendants. Doc. 52. On the surface, that transaction is similar to the computer hardware transaction. It involved a $3, 247, 200 contract purportedly negotiated by Progressive as the School District's project manager for the development of software for the School District (the “software transaction”). Id. at 4. The nominal (“on paper”) vendor for the software transaction was a construction company, Pinnacle/CSG, Inc. Id. at 3. Though conceding the facts are somewhat murkier, the Government alleges the Defendants were the actual vendor for the software transaction just as they were the vendor in the computer hardware transaction. Id. at 4, 6.

         But the similarities are truly only on the surface. First, the Government has not been able to prove that any of the $3, 247, 200.00 paid in the software transaction found its way to the Defendants. Second, the software transaction was facilitated by bribes paid to the School District's former superintendent, Romain Dallemand. The Government has not been able to establish that the Defendants were involved in the payments to Dallemand or that those payments facilitated the computer hardware transaction.

         Finally, the murky facts suggest the software transaction was structured substantially differently, and certainly was more convoluted, than the straightforward computer hardware scheme to defraud. There is no question that CompTech was not the vendor in the computer hardware transaction. But Pinnacle and the Defendants vehemently maintain that Pinnacle was the vendor in the software transaction. See Doc. 61 at 9. In fact, Pinnacle, about six months after it agreed to develop the software, threatened to sue the School District, alleging that the School District had somehow thwarted Pinnacle's performance as the software developer. Bibb Cty. Sch. Dist. v. Dallemand, 5:16-cv-549-MTT, letter from Knowles, Doc. 219-1 (M.D. Ga. Feb. 26, 2018). Pinnacle has now asserted that claim as a counterclaim in a lawsuit brought by the School District in this Court, in which the School District alleges, among many other things, that Pinnacle and Progressive and their principals defrauded the School District in the software transaction. See generally Bibb Cty. Sch. Dist. v. Dallemand, 5:16-cv-549-MTT, Countercl., Doc. 197 (M.D. Ga. Jan. 18, 2018). While the Government cites evidence suggesting that the elaborate structure of the software transaction was constructed to hide the Defendants' involvement in the software transaction, the Defendants point to written agreements between Progressive and Pinnacle demonstrating, they say, that Progressive's role in the development of the software was well within its proper role as the School District's project manager. About the only thing clear is that the software transaction was substantially different than the structure of the computer hardware transaction.

         II. ANALYSIS

         A. 404(b) Standard

         Federal Rule of Evidence 404(b) provides that “[e]vidence of a crime, wrong, or other act is not admissible to prove a person's character in order to show that on a particular occasion the person acted in accordance with the character.” However, “[t]his evidence may be admissible for another purpose, such as proving motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident.” Fed.R.Evid. 404(b)(2). The Eleventh Circuit has stated that Rule 404(b) is a rule of inclusion and that the test for admissibility of 404(b) evidence is as follows:

To be admissible under Rule 404(b)(2), a prior act (1) must be relevant to an issue other than defendant's character, (2) must be sufficiently proven to permit a jury determination that the defendant committed the act, (3) must have probative value that is not substantially outweighed by unfair prejudice, and (4) must otherwise satisfy Federal Rule of Evidence 403.

United States v. Nerey, 877 F.3d 956, 974 (11th Cir. 2017) (citing United States v. Eckhardt, 466 F.3d 938, 946 (11th Cir. 2006)). “In assessing the probative value of the extrinsic evidence [pursuant to Rule 404(b)], we evaluate the Government's incremental need for the evidence to prove guilt beyond a reasonable doubt, ‘the overall similarity of the extrinsic and the charged offenses and the closeness or remoteness in time of the charged to the extrinsic offense.'” United States v. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.