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United States v. Woods

United States District Court, W.D. Arkansas, Fayetteville Division

July 25, 2018

UNITED STATES OF AMERICA PLAINTIFF
v.
JONATHAN E. WOODS; OREN PARIS III; and RANDELL G. SHELTON, JR. DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          TIMOTHY L. BROOKS UNITED STATES DISTRICT JUDGE

         Currently before the Court are:

• Defendant Jonathan E. Woods's Motion for Judgment of Acquittal under Fed. R. Crim. P. 29 or New Trial under Fed. R. Crim. P. 33 (Doc. 395) and Brief in Support (Doc. 396), and the Government's Response in Opposition (Doc. 403); and
• Defendant Randell G. Shelton, Jr.'s Motion for Judgment of Acquittal, or in the Alternative, a New Trial (Doc. 392) and Memorandum Brief in Support (Doc. 397), and the Government's Response (Doc. 402).

         For the reasons given below, both Motions are DENIED.

         I. BACKGROUND

         Jonathan Woods, Oren Paris, and Randell Shelton were charged in a Second Superseding Indictment with, respectively, seventeen, fifteen, and fifteen felony counts related to public corruption schemes. See Doc. 74. Mr. Paris entered a guilty plea to one of those counts on April 4, 2018. See Doc. 321. Nearly a month later, on May 3, a jury convicted Mr. Woods and Mr. Shelton at trial on fifteen and twelve of the felony counts against them, respectively. See Doc. 378. Now, Messrs. Woods and Shelton ask this Court to enter judgments of acquittal on all the counts charged against them, notwithstanding the jury's verdict. Alternatively, they ask this Court to grant them a new trial. The Government opposes these Motions, which are now ripe for decision.

         II. LEGAL STANDARD

         Fed. R. Crim. P. 29(a) requires the Court, on a defendant's motion, to "enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction." However, "a district court has very limited latitude to do so and must not assess witness credibility or weigh evidence, and the evidence must be viewed in a light most favorable to the government." United States v. Hassan, 844 F.3d 723, 725 (8th Cir. 2016). When reviewing the sufficiency of the evidence to support a conviction, the Court must resolve evidentiary conflicts in the Government's favor, and accept all reasonable inferences from the evidence that support the verdict. See United States v. Weaver, 554 F.3d 718, 720 (8th Cir. 2009). "A verdict will only be Overturned if no reasonable jury could have found the defendant guilty beyond a reasonable doubt." Id.

         Alternatively, Fed. R. Crim. P. 33(a) states that "[u]pon the defendant's motion, the court may vacate any judgment and grant a new trial if the interest of justice so requires." Unlike with respect to Rule 29, "the court has broad discretion in deciding motions for new trial, and its decision is subject to reversal only for a clear and manifest abuse of discretion." Hassan, 844 F.3d at 725. "Also in contrast to Rule 29, in considering a motion for new trial, the court need not view the evidence in the light most favorable to the verdict and it is permitted to weigh the evidence and evaluate the credibility of the witnesses." Id. at 725-26. "Nonetheless, motions for new trials based on the weight of the evidence generally are disfavored, and the district court's authority to grant a new trial should rarely be exercised." Id. at 726. "The district court will only set aside the verdict if the evidence weighs heavily enough against the verdict that a miscarriage of justice may have occurred." United States v. Serrano-Lopez, 366 F.3d 628, 634 (8th Cir. 2004) (quoting United States v. Rodriguez, 812 F.2d 414, 417 (8th Cir. 1987)) (internal quotation marks omitted).

         III. DISCUSSION

         The Government's evidence at trial concerned two separate schemes involving corruption of Mr. Woods while he was a senator in the Arkansas General Assembly. In both of these schemes, the Government put on proof that Mr. Woods took official actions to direct money from the General Improvement Fund ("GIF") to private entities-in exchange for cash payments to him, and also in exchange for the hiring of his friends or loved ones by the entities (or their affiliates) who received the GIF money. One scheme involved directing GIF funds to an entity called AmeriWorks. The other scheme involved directing GIF funds to an Arkansas bible college called Ecclesia College ("Ecclesia"). Participants in the AmeriWorks scheme included another member of the Arkansas General Assembly named Micah Neal, [1] and a lobbyist named Milton "Rusty" Cranford, who was also the CEO of the Arkansas division of Alternative Opportunities, an affiliate of AmeriWorks. Participants in the Ecclesia scheme included Mr. Neal, Mr. Paris, who was the president of Ecclesia, and Mr. Shelton, a businessman who was hired as an independent contractor to provide consulting services to Ecclesia. The Government did not put on any evidence that Mr. Cranford was involved in the Ecclesia scheme, or that Mr. Paris or Mr. Shelton were involved in the AmeriWorks scheme. But the Government provided evidence that Mr. Woods and Mr. Neal were involved in both schemes.

         As noted above, Mr. Woods and Mr. Shelton both challenge the sufficiency and the weight of the evidence against them at trial. The Court will address those matters below. But first, the Court will take up a few additional arguments that Mr. Woods raises concerning the instructions that this Court gave to the jury, and the speed with which the jury delivered its verdict.

         Mr. Woods contends that the Court incorrectly instructed the jury on the meaning of the phrase "scheme to defraud." The Court instructed the jury that:

The phrase "scheme to defraud" as used in [these] instruction[s] means any plan or course of action intended to deceive or cheat another out of the right to honest services where a bribe or kickback is solicited, paid, or received in exchange for official action or an official act. The definition of "official action" or "official act" is explained further in Instruction No. 13.

See Doc. 383, pp. 19, 25, 29. This definition of "scheme to defraud" was lifted word-for-word from the Eighth Circuit's Model Criminal Jury Instructions, and the Court believes it is correct. See 8th Cir. Crim. Jury Instr. § 6.18.1346 (2017).

         Mr. Woods argues that this Court should have instead relied on the case of United States v. McNeive, 536 F.2d 1245 (8th Cir. 1976) when instructing the jury on the meaning of the phrase "scheme to defraud." The Court disagrees, and believes that McNeive is both legally and factually inapposite to the instant matter. For one thing, unlike this case, McNeive did not involve a prosecution under 18 U.S.C. § 1346, which was enacted more than a decade after McNeive. For another, while the underlying conduct in McNeive was a city plumbing inspector's acceptance of unsolicited $5 "gratuities or tips" (totaling $490 over a four-year period) for the nondiscretionary processing of plumbing permit applications, see 536 F.2d at 1246, 1251-52, the underlying conduct in the instant matter involves the solicitation and receipt of tens of thousands of dollars in bribes by state legislators from private entities, in exchange for the discretionary direction of hundreds of thousands of taxpayer dollars to those entities. The two factual scenarios are not remotely comparable.

         Mr. Woods also contends that the Court incorrectly instructed the jury on the meaning of the phrase "official act." The Court instructed the jury that:

         For something to be an "official action" or "official act" . . ., it must satisfy two elements, which are:

One, the government must identify a question, matter, cause, suit, proceeding, or controversy that may at any time be pending or may by law be brought before a public official, which would involve a formal exercise of governmental power that is similar in nature to a lawsuit before a court, a determination before an agency, or a hearing before a committee; and
Two, the government must prove that the public official either agreed to make a decision or take an action, or actually did make a decision or take an action on that question, matter, cause, suit, proceeding, or controversy.
In this case, the government alleges that Mr. Woods and Micah Neal agreed to accept bribes or kickbacks in exchange for approving and directing GIF monies from Economic Development Districts to specific recipients, advising other legislators and Economic Development District officials to direct and approve GIF monies from Economic Development Districts to specific recipients, and sponsoring and voting for legislation directing GIF monies to Economic Development Districts and state agencies for grants to specific recipients. When considering the elements of a Count for Honest Services Fraud, it will be your responsibility to determine whether the government has proved beyond a reasonable doubt the existence of a scheme to defraud that involved a bribe or kickback in exchange for an official act.
It is not necessary that an act or action by a public official ultimately be successful in attaining its desired end, in order for it to qualify as an official act. Nor is it necessary that an act or action by a public official be the final or ultimate act or action on a pending matter, in order for it to qualify as an official act. Rather, an intermediate step towards some ultimately unaccomplished end may also qualify as an official act, so long as that intermediate step satisfies both of the elements listed in this instruction.
Merely hosting an event, meeting with other officials, speaking with interested parties, or expressing support for a pending matter, is not, standing alone, an official act. However, evidence that a public official hosted an event, met with other officials, spoke with interested parties, or expressed support for a pending matter, may be considered as evidence that the public official agreed to take an official act, if such evidence is corroborated by other evidence that in doing so the public official was attempting to pressure or advise another public official on a matter pending before that other public official. An official act by a public official may include using his official position to exert pressure on another official to perform an official act, or to advise another official, knowing or intending that such advice will form the basis for an official act by another official.

(Doc. 383, pp. 38-39) (emphasis in original).

         In crafting this particular instruction, the Court relied heavily on Chief Justice Roberts's unanimous opinion in the United States Supreme Court case of McDonnell v. United States, frequently quoting it verbatim, and otherwise always carefully and conservatively summarizing it without attempting to extend that case's reasoning beyond its plain text. See 136 S.Ct. 2355, 2368-72 (2016). McDonnell is binding authority, and this Court believes it accurately described McDonnell's requirements to the jury.

         Mr. Woods also asserts that "[d]espite sixteen (16) days of trial testimony and over four (400) hundred [sic] documentary exhibits totaling thousands of pages, the jury reached [its verdict] in less than two (2) hours of deliberations after it received additional instruction," that this "additional instruction" was "constitutionally ambiguous and violated his right to due process, a fair trial, and impartial jury under the Fifth, Sixth, and Seventh Amendments to the United States Constitution, "[2] and that "it shocks the conscience as to the speed with which the jury delivered its verdict after it received additional instruction." See Doc. 396, pp. 2-3. The Court believes this argument is meritless. "[B]rief jury deliberation alone is not a sufficient basis for a new trial. 'At best, it is a factor to be considered when deciding a motion for new trial, and even then cannot be the only basis for granting a new trial.'" United States v. Aguilera, 625 F.3d 482, 487 (8th Cir. 2010) (quoting United States v. Cunningham, 108 F.3d 120, 124 (7th Cir. 1997)). And here, that factor carries no weight at all in Mr. Woods's favor, given the critical facts that he artfully omits: (1) that the jury conducted two full days' worth of deliberations (over a period of three calendar days); and (2) that the jury requested and received "additional instructions" from the Court throughout its deliberations, from very early in the process, through its middle, and all the way to the end. See Docs. 375-77. Every objective sign indicates that this jury took its job extraordinarily seriously and performed its task with great care and thoughtfulness, en route to acquitting Mr. Woods of two of the seventeen counts against him (and acquitting Mr. Shelton of three of the fifteen counts against him). See Doc. 378. This jury spent more days deliberating, and asked a larger number of questions during its deliberations, than any other jury at any other trial over which the undersigned has presided during his four and a half years on the bench.

         With these preliminary issues out of the way, the Court will now turn to the matter of whether the evidence at trial was sufficient to support the jury's verdict. First, as context for what follows, the Court will briefly summarize the evidence concerning the control that individual legislators, specifically including Mr. Woods and Mr. Neal, exercised over the GIF process. Next, the Court will discuss the evidence concerning the existence and execution of the AmeriWorks scheme. Finally, the Court will take up the evidence concerning the existence and execution of the Ecclesia scheme.

         A. Sufficiency of the Evidence to Support the Verdict

         1. Individual Legislators' Control over the GIF Process

         At trial, the Government introduced legislative records into evidence, showing that Mr. Woods and Mr. Neal, along with other legislators, sponsored and voted for legislation that appropriated GIF to economic development districts, including the Northwest Arkansas Economic Development District ("NWAEDD"). See, e.g., Government Exhibits 122-26. Many witnesses with direct knowledge of the economic development districts' GIF grant award process, including former NWAEDD executive director Mike Norton, NWAEDD deputy director Jeremy Ragland, West Central Arkansas Planning and Development District ("WCAPDD") director Dwayne Pratt, Mr. Neal, state senator Bart Hester, and Berryville Mayor Tim McKinney (who was on the NWAEDD's board of directors), all testified that those districts' GIF award process was effectively controlled by individual legislators, with each legislator in a district being apportioned a share of that district's GIF to award to applicants as he wished. This testimony was corroborated by extensive documentary evidence, including spreadsheets maintained by Mr. Norton that tracked Mr. Woods's and Mr. Neal's shares of the NWAEDD's GIF, numerous emails in which Mr. Woods instructed the NWAEDD to award his own GIF to various applicants, and text messages and emails from Mr. Woods to Mr. Hester and Mr. Norton regarding awards of other legislators' GIF. See, e.g., Government Exhibits 116, 142-43, 149, 161, 175-81.

         2. The ...


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