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United States v. Laney

United States Court of Appeals, Ninth Circuit

February 5, 2018

United States of America, Plaintiff-Appellee,
v.
Kevin Laney, Defendant-Appellant. United States of America, Plaintiff-Appellee,
v.
Brian Federico, Defendant-Appellant.

          Argued and Submitted October 17, 2017 San Francisco, California

         Appeal from the United States District Court Nos. 4:12-cr-00862-YGR-3, 4:12-cr-00862-YGR-2 for the Northern District of California Yvonne Gonzalez Rogers, District Judge, Presiding

          Scott A. Sugarman (argued), Sugarman & Cannon, San Francisco, California, for Defendant-Appellant Kevin Laney.

          Robert J. Beles (argued) and Paul McCarthy, Law Offices of Beles & Beles, Oakland, California, for Defendant-Appellant Brian Federico.

          J. Douglas Wilson (argued), Chief, Appellate Division; Brian J. Stretch, United States Attorney; United States Attorney's Office, San Francisco, California; for Plaintiff-Appellee.

          Before: Michael Daly Hawkins, William A. Fletcher, and Richard C. Tallman, Circuit Judges.

         SUMMARY[*]

         Criminal Law

         The panel reversed the defendants' convictions, and remanded, in a case in which defense counsel stipulated that their clients waived their right to a jury trial.

         The panel concluded that the convictions are supported by sufficient evidence, but that the jury-trial waivers were ineffective.

         The panel held that the proper practice under Fed. R. Crim. P. 23(a) is for the defendant to personally execute the written waiver; a written stipulation signed by defense counsel alone-like the stipulations at issue in this case- will not raise a presumption of validity. The panel explained that the absence of a defendant's signature will not constitute reversible error if the record otherwise shows that the defendant's waiver was voluntary, knowing, and intelligent. The panel could not determine from the record whether the defendant's waivers were voluntary, knowing, and intelligent. The panel wrote that the stipulation here was tantamount to an oral waiver by counsel outside the defendant's presence, which this court's precedent deems insufficient.

          OPINION

          HAWKINS, CIRCUIT JUDGE.

         In these consolidated appeals, we must determine whether a presumption of validity attaches to a stipulation[1]by defense counsel that their clients waive their right to a jury trial on their criminal charges. Defendants Kevin Laney and Brian Federico contend that: (1) the stipulations submitted by their respective trial counsel did not effectively waive their Sixth Amendment rights and (2) their convictions on several counts of conspiracy and mail fraud are not supported by sufficient evidence. We conclude that counsel's stipulations in this case did not raise a presumption of validity, and the record is insufficient to show that the jury trial waivers were voluntary, knowing, and intelligent. Therefore, although we conclude that the convictions are supported by sufficient evidence, we reverse and remand based on the ineffective jury trial waivers.

         I. BACKGROUND

         The scheme giving rise to the convictions below arose out of Laney and Federico's work in the construction and concrete industries. Laney worked as a project manager for Matrix Services, Inc. ("Matrix"), an industrial construction company specializing in construction and repair work in the energy industry. Federico worked as a manager of the concrete company Imperial Shotcrete ("Imperial"), which served as a subcontractor on several Matrix projects.

         The state presented evidence that, in approximately 2005, Federico approached Imperial's owner, Miguel Ibarria, with an arrangement that would allow Ibarria, Federico, Laney, and other Matrix project managers to make additional money from Matrix projects. Under the arrangement, Federico would provide Ibarria with the specifications for a job, and Ibarria would provide a quote consisting of the project expenses and Imperial's standard markup. Federico would then talk to the assigned Matrix project manager, who would inform Federico when there was "more room" in the budget for concrete work. Federico would then come back to Ibarria with another, higher bid suggestion that Imperial would in turn submit to Matrix as its bid on the project. That new inflated bid generally corresponded to Matrix's internal budget ceiling for concrete work. The Matrix project manager would approve the bid and award the job to Imperial. Imperial would complete the concrete work and bill Matrix "for whatever number they . . . told [Ibarria] to make the proposal for." Federico would provide Ibarria with "some extra wording" to include on the invoices to Matrix. The Matrix project manager involved would approve the invoice, and Matrix would pay Imperial.

         After Matrix paid Imperial, Imperial would receive an invoice from a fictitious company, in fact fabricated by the involved Matrix project managers, purporting to charge for work associated with the project. These invoices were entirely false and described materials not used or services not performed. Federico would supply the project manager with the amount to include on the false invoice, and the project manager would submit that invoice to Imperial. Once the project manager received a check from Imperial, he would deposit the money in his own account and write a check back to Federico for his agreed-upon share of the money.

         The scheme continued for several years, involved several projects, and ultimately resulted in Laney and Federico receiving hundreds of thousands of dollars through these fictitious entities. In 2010, Matrix, suspecting a potential financial fraud within the company, launched an internal investigation and vendor audit of Imperial. The amount of the fraud ultimately uncovered was approximately $1.6 million.

         II. PROCEDURAL HISTORY

         An investigation by the Federal Bureau of Investigation ("FBI") soon followed Matrix's internal investigation. The FBI investigation led to the indictment of Laney, Federico, Ibarria, and two other Matrix project managers, Brandon Hourmouzus and Charles Burnette, on multiple counts of mail fraud and conspiracy to commit mail fraud.

         A. ...


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