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United States v. Tucker

United States Court of Appeals, Tenth Circuit

March 11, 2014

UNITED STATES OF AMERICA, Plaintiff - Appellee,
v.
WILLIAM JEFFREY TUCKER, TOMMY WAYNE DAVIS, MICHAEL SCOTT CALHOUN, Defendants - Appellants

Page 1055

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF OKLAHOMA. (D.C. NOS. 6:12-CR-00061-RAW-3, 6:12-CR-00061-RAW-2 & 6:12-CR-00061-RAW-1).

J. Lance Hopkins, Tahlequah, Oklahoma, for Appellant William Jeffrey Tucker.

Art Fleak, Tulsa, Oklahoma, for Appellant Tommy Wayne Davis.

James G. Wilcoxen, Muskogee, Oklahoma, for Appellant Michael Scott Calhoun.

Thomas M. Wright, Assistant United States Attorney (Mark F. Green, United States Attorney, and Linda A. Epperley, Assistant United States Attorney, with him on the brief), Office of the United States Attorney of the Eastern District of Oklahoma, Muskogee, Oklahoma, for Appellee.

Before TYMKOVICH, HOLLOWAY, and MATHESON, Circuit Judges.

OPINION

Page 1056

MATHESON, Circuit Judge.

A grand jury indicted Michael Scott Calhoun, Tommy Wayne Davis, and William Jeffrey Tucker (collectively, the " Defendants" ) on 60 counts of wire fraud, mail fraud, and conspiracy to commit wire and mail fraud. The indictment was based on Mr. Calhoun's grand jury testimony in which he incriminated himself, Mr. Davis, and Mr. Tucker. Mr. Calhoun testified upon the advice of his counsel at the time, Tom Mills, who was paid by Texas Capital Bank, the alleged victim of the fraud.

Page 1057

After Mr. Calhoun secured new counsel, the Defendants moved to quash the indictment and suppress Mr. Calhoun's grand jury testimony, contending the indictment was obtained in violation of the Fifth Amendment Indictment Clause, Mr. Calhoun's Fifth Amendment privilege against self-incrimination, and Mr. Calhoun's Sixth Amendment right to effective assistance of counsel. The district court denied the Defendants' motion.

In these consolidated, pretrial interlocutory appeals, the Defendants challenge the district court's denial of their motion to quash. The Defendants urge us to exercise jurisdiction under the " collateral order" exception to the final judgment rule, first articulated in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546-47, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949).

We conclude the collateral order doctrine does not apply and dismiss these appeals for lack of jurisdiction under 28 U.S.C. § 1291.

I. BACKGROUND

A. Factual Background

The factual background of this case is complex, involving an elaborate alleged fraud scheme. Because the interlocutory appeals narrowly focus on the validity of the indictment, we briefly review the factual history and then concentrate on events after Mr. Calhoun was subpoenaed to appear before a grand jury.

1. The Tri-County Fraud Scheme

At the time of the conduct charged in the indictment, Mr. Calhoun was the general manager of Tri-County Autoplex (" Tri-County" ), an automotive dealership in Hugo, Oklahoma. Co-defendant Mr. Davis was employed as Tri-County's sales manager.

In May 2007, Tri-County obtained a line of credit from Texas Capital Bank (the " Bank" ), pledging vehicles in its inventory as collateral. Before issuing the line of credit, the Bank required Tri-County to provide documentation proving ownership and possession of these vehicles. As proof of ownership, the Bank accepted Manufacturers Statements of Origin (" MSO's" ), which are industry-standard documents listing each vehicle's manufacturing history, make, model, and vehicle identification number (" VIN" ). MSO's list the dealership as the owner of the vehicle until it is sold and the dealership issues a title to the purchaser.

According to the indictment, Tri-County leadership entered into a conspiracy with James Dean Kayvonfar and Charles Matthew Spires, employees at Automotive Transfers Incorporated (" ATI" ).[1] ATI is a business that assists dealerships by locating and transferring vehicles from one dealership to another. Mr. Kayvonfar and Mr. Spires would send fraudulent MSO's to Tri-County, which would provide the MSO's to the Bank as proof of ownership for vehicles that were never part of its inventory. The Bank would then extend additional credit to Tri-County.

Tri-County allegedly sought to conceal this fraudulent conduct by telling auditors that some of its fictitious inventory was on loan to another dealership in Hugo called " T or T Auto." Mr. Tucker--the third co-defendant involved in this appeal--owned T or T Auto. The indictment alleges that Mr. Calhoun and Mr. Davis would call Mr. Tucker and list VIN numbers for fictitious cars. When auditors called in reference to those vehicles, Mr. Tucker would recite

Page 1058

those VINs, falsely confirming those vehicles were on loan to T or T Auto.

The Defendants contend the Bank participated in the Tri-County fraud scheme. They allege the Bank's loan officer, Clint Kuykendall, " routinely engaged in the practice of creating false and inadequate audits, turning a blind eye to inadequate and suspicious paperwork, accepting dual and fake financial reports, and allowing cars to be sold out of trust." Aplt. Br. at 4-5. The Government refers to the Bank as " the victim in this case" and has not charged Mr. Kuykendall or any other Bank employee. Aplee. Br. at 9.

2. Underlying Civil Litigation

In May 2010, Steve Rouse--who in 2007 was a co-owner of Tri-County -- brought a civil action in Oklahoma state court alleging fraud in the financing and management of the dealership. The defendants included Mr. Calhoun, Mr. Davis, the Bank, and Mr. Kuykendall. Mr. Calhoun retained Texas attorney Larry Friedman to represent him.

On August 25, 2011, a jury awarded Mr. Rouse $65 million in actual and punitive damages against all defendants, including the Bank.

3. Mr. Calhoun's Grand Jury Subpoena[2]

In 2011, Mr. Calhoun received a subpoena to appear before a federal grand jury in the Eastern District of Oklahoma, along with a letter informing him that he was a target of the grand jury's investigation into the Tri-County fraud scheme.

FBI Agent Jeff Youngblood then contacted Mr. Calhoun to ask if he would cooperate with the grand jury investigation. Mr. Calhoun responded that he intended to cooperate, but he could not afford counsel because he had exhausted his financial resources in the civil litigation.

On August 19, 2011, the district court appointed Rex Earl Starr to represent Mr. Calhoun. Mr. Starr contacted Mr. Calhoun to say that he would be on vacation until the end of the month. According to Mr. Calhoun, Mr. Starr took no further action to represent him.

As noted above, the civil judgment against the Bank and Mr. Calhoun (among others) was entered on August 25, 2011. Shortly thereafter, Mr. Calhoun's civil counsel, Mr. Friedman, notified him that he intended to ask the Bank to retain and pay for criminal counsel for Mr. Calhoun. Mr. Friedman explained that if Mr. Calhoun testified to the grand jury that the alleged fraud originated with him and other Tri-County leadership, that testimony could help overturn the civil judgment against the Bank.

Mr. Friedman also prepared an " Affidavit of Non-Prosecution" for the Bank to

Page 1059

sign, which said, " It is Texas Capital Bank's desire that Michael S. Calhoun not be prosecuted for any alleged offense arising out of or related to" Tri-County's business with the Bank. Calhoun ROA, Vol. I at 54. Mr. Friedman assured Mr. Calhoun that even if he did get indicted, he would only receive probation. Mr. Calhoun agreed to Mr. Friedman's plan and terminated Mr. Starr's representation. The Bank then selected and retained Robert Wyatt to represent Mr. Calhoun. According to Mr. Calhoun, Mr. Wyatt even offered to have the Bank refinance his mortgage to assist with his financial difficulties if he cooperated fully with the Government.

Mr. Wyatt represented Mr. Calhoun for two months in the fall of 2011. He spoke with the Assistant United States Attorney on the case, Ryan Roberts, and negotiated a plea deal under which Mr. Calhoun would plea to a one count indictment with his sentence capped at 60 months. Mr. Calhoun told Mr. Wyatt the deal was not good enough and refused to appear at meetings Mr. Wyatt set up with the FBI. Mr. Friedman advised Mr. Calhoun to terminate Mr. Wyatt's representation, which he did.

Mr. Friedman then contacted the Bank to procure counsel for Mr. Calhoun again. The Bank hired Tom Mills in late December 2011 or early January 2012. As with Mr. Wyatt, the Bank paid for Mr. Mills's representation.

Mr. Mills met with Mr. Calhoun in Mr. Friedman's office in Texas. At this meeting, Mr. Friedman told Mr. Mills that he believed Mr. Calhoun should not be prosecuted or alternatively should receive probation only. Mr. Mills told Mr. Friedman this " should not be a problem." Calhoun ROA, Vol. I at 91.

Mr. Mills, Mr. Friedman, and Mr. Calhoun together met with the Bank's attorneys, who agreed to contact the United States Attorney's Office and tell them that the Bank did not want Mr. Calhoun prosecuted.

Mr. Mills set up a meeting with Agent Youngblood in Oklahoma in January or February 2012. Mr. Mills told Agent Youngblood that the Bank did not want Mr. Calhoun prosecuted. Mr. Calhoun later testified that he believed, based on this exchange, that he would not be indicted.

On January 19, 2012, Mr. Calhoun gave Agent Youngblood a complete statement describing Tri-County's dealings with the Bank, thereby incriminating himself.

On February 15, 2012, Mr. Calhoun testified before the grand jury. Before he took the stand, Mr. Mills told Mr. Calhoun he was working on a plea deal with AUSA Roberts, but that Mr. Roberts could not announce the deal until all the other defendants in the case had been tried and sentenced. Mr. Mills allegedly told Mr. Calhoun that under the terms of this deal, he would receive probation after giving substantial assistance to the grand jury investigation.

During Mr. Calhoun's grand jury testimony, AUSA Roberts asked him if he understood he had a deal with the Government whereby he would plead guilty to a one-count indictment for conspiracy to defraud a financial institution and his sentence would be capped at five years, with a downward departure to less than five years if he provided substantial assistance. Mr. Calhoun said yes, but later testified at the district court's hearing on his motion to quash that he believed the downward departure would get him to probation at worst.

In his grand jury testimony, Mr. Calhoun incriminated himself and his co-defendants, including Mr. Davis and Mr. Tucker. At ...


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