United States v. Dimitar Petlechkov
United States v. Dimitar Petlechkov
Opinion
*766 Proper venue in a criminal case is an "essential part[ ] of a free and good government." The Federal Farmer, in 2 The Complete Anti-Federalist 230 (Herbert J. Storing ed. 1981). The government failed to meet its constitutional obligation to prove venue for most of the charges it brought against Dimitar Petlechkov. Accordingly, we affirm in part, reverse in part, and remand.
I.
FedEx provides shipping discounts to high-volume customers. In order to obtain such a discount, Dimitar Petlechkov lied to FedEx and claimed he was a vendor for a high-volume shipper. He used those discounted rates to offer shipping services to third parties, pocketing the profit margin between what he charged the third parties and what he paid FedEx. He shipped nearly 30,000 packages this way until FedEx finally caught him.
The government charged Petlechkov with 20 counts of mail fraud.
See
II.
Petlechkov challenges the sufficiency of the evidence underlying his mail fraud convictions. On appeal, "the relevant question is whether, after viewing the evidence in the light most favorable to the prosecution,
any
rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt."
Jackson v. Virginia
,
To convict Petlechkov of mail fraud, the government had to prove that he devised a scheme to defraud, used the mails in furtherance of that scheme, and intended to deprive the victim of money or property.
Petlechkov concedes that he made a misrepresentation but contends that it was not material. His misrepresentation was simple: he called FedEx's account manager for General Dynamics-one of FedEx's larger clients-and claimed he was a General Dynamics vendor entitled to its discounted shipping rate. Soon afterwards, FedEx linked Petlechkov's account to General Dynamics, and he was able to ship packages at its rate. All it took was a single phone call. Petlechkov makes two arguments for why his phone call could not have influenced a "person[ ] of ordinary prudence and comprehension."
Petlechkov's arguments fail. First, whatever discounts the General Dynamics agreement
required
FedEx to provide, nothing in the record suggests that the agreement
barred
FedEx from being more generous than required. And indeed, FedEx's standard "operating procedure" was to extend a customer's discounts to its vendors. R. 75, Pg. ID 384-85, 397-98. Because FedEx had such a policy, an ordinary, prudent employee would follow it. Thus, Petlechkov's false statement was capable of influencing FedEx's decision. And indeed, it
actually
influenced FedEx's decision-FedEx gave him a discount that lasted for several years. The fact that Petlechkov's false statement caused its intended result is strong evidence that it was material.
See
United States v. Bohn
,
Petlechkov's second argument fares no better. He claims that FedEx violated the Sarbanes-Oxley Act by extending him a discount.
See generally
Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204,
Newborn did testify that in some circumstances unwritten discounts violate Sarbanes-Oxley. But he never said that unwritten discounts like Petlechkov's-contained in a written agreement but extended to someone not named in that agreement-violated Sarbanes-Oxley. And more specifically, Newborn never said that Petlechkov's specific vendor discount violated Sarbanes-Oxley. Despite Petlechkov's arguments to the contrary, a rational juror could have found his misrepresentation material.
III.
Next, Petlechkov argues that, even if he is in fact guilty, we should still dismiss the case against him because the government failed to prove that venue was proper in the Western District of Tennessee.
A.
The government argues we should not reach the merits of Petlechkov's venue objection because he "waived his challenge to venue by failing to raise it pre-trial." Appellee Br. at 10. In doing so, the government's brief bounces back and forth between the concepts of waiver and forfeiture. Though attorneys (and even courts) often use these concepts "interchangeably," they are distinct.
Brenay v. Schartow
,
But the government has not shown that Petlechkov's attorney can singlehandedly waive his client's right to be tried in a proper venue. The Supreme Court has distinguished between "tactical" rights (which can be waived by the defendant's attorney) and "fundamental" rights (which can only be waived by the defendant himself).
Gonzalez v. United States
,
But ultimately it does not matter because there is no evidence that
either
Petlechkov
or
his attorney "intentional[ly] relinquish[ed]" Petlechkov's right to proper venue.
Olano
,
To the extent the government is claiming forfeiture, that argument fails as well. Again, forfeiture "is the failure to make the timely assertion of a right."
Here, the government concedes that there was no venue defect apparent on the face of the indictment and does not argue that Petlechkov himself had some other reason to know of a defect before trial. Instead, the government claims the purported concession of venue by Petlechkov's attorney shows that Petlechkov was on notice of a venue defect. The government cites only one case:
United States v. Adams
,
*769 Accordingly, as the government has not shown that Petlechkov waived or forfeited his venue objection, we must address the merits of Petlechkov's venue argument.
B.
The Constitution requires that criminal defendants be tried in the place where they committed their alleged crimes. U.S. Const. art. 3, § 2, cl. 3 ;
id.
amend. VI. Determining proper venue is a two-step process. If the criminal statute has a specific venue provision, then courts must accept that congressional choice (assuming it is otherwise constitutionally permissible). If not, then courts determine the proper venue based on "the nature of the crime alleged and the location of the act or acts constituting it."
Travis v. United States
,
The government says we should skip to the second step and analyze the "nature of the crime alleged."
Travis
,
The government must prove proper venue for each count by a preponderance of the evidence.
United States v. Beddow
,
Counts 6, 13, and 19
. The evidence showed that the packages underlying these three counts were all sent from Munford, Tennessee, which is in the Western District of Tennessee. The sender for each package was Aser Gruppe International. Aser Gruppe's CEO Stephen Osborn testified that his company generally shipped its packages from a FedEx drop box in Munford. Though Osborn (understandably) did not have a specific recollection of the three packages at issue, the government does not need to present direct evidence of venue. Instead, the government can prove venue based on a reasonable inference from circumstantial evidence.
United States v. Charlton
,
Counts 1-5, 7-12, 14-18, and 20
. The packages underlying each of these counts were sent from, and delivered to, destinations outside of the Western District of Tennessee. So to prove venue for these counts, the government needed to show that the packages moved through the Western District of Tennessee on the way to their destinations.
Wood
,
The government's venue argument for these counts relies on how FedEx's shipping process works. FedEx packages pass through hubs, where employees sort them by destination and then send them on their way. See Tony Vieira, Why Use A Hub and Spoke System , FedEx (April 16, 2009), https://about.van.fedex.com/blog/why-use-a-hub-and-spoke-system. The only hub mentioned during trial was the one in Memphis, Tennessee, which is in the Western District. But the government presented no evidence tying any particular package to that Memphis hub. Yet, the government argues, the jury could have reasonably inferred that each of the packages moved through it.
But the government slices the record too thin. No witness testified that Memphis was FedEx's only hub or even the primary hub. Indeed, the record shows that FedEx has "several hubs" outside of Memphis, even though they were not specifically named. R. 75, Pg. ID 411. And unlike Counts 6, 13, and 19, there is no evidence of typical shipping practices, e.g., that FedEx typically sent packages from certain locations through its Memphis hub. Although the record reflects that FedEx's worldwide headquarters is in Memphis, no witness said that means any particular package moved through FedEx's separate Memphis hub .
The government has one final argument that applies only to the packages with international destinations. According to the government, the only international hub proven at trial was the Memphis hub. Thus, the government argues, the jury could have inferred that any packages shipped abroad must have moved through Memphis. If the evidence showed that Memphis was indeed FedEx's only international hub, then that would sustain venue for the counts relying on packages with international destinations. But no one testified that Memphis is the only international hub; a witness just said that it is " an international hub." Id. at 414 (emphasis added). Nor did anyone testify about FedEx's typical shipping procedures for international packages. So the counts relying on international packages are no different than the others.
In sum, it is
possible
that some of the packages at issue went through the Memphis hub. But that is not enough. The government must prove venue count-by-count, and to do that it must present enough evidence to allow a rational juror to find venue by a preponderance of the evidence.
See
Wood
,
C.
Petlechkov did not argue that we should dismiss with prejudice-i.e., without giving the government a chance to try again. And the government did not address the issue either. But we have the discretion and obligation to explain the effect of our decision.
See
United States v. Taylor
,
This issue turns on the Double Jeopardy Clause of the Fifth Amendment. The Double Jeopardy Clause bars a retrial after an acquittal. U.S. Const. amend. V ;
Evans v. Michigan
,
A dismissal on venue grounds does not qualify as an "acquittal" for double jeopardy purposes. Though venue is a factual issue that the government must prove, it is not an element of the underlying criminal offense.
United States v. Kaytso
,
This is true even for mail fraud, where the test for venue-that mail moved through the district-resembles a substantive element of the offense.
See
Wood
,
* * *
We affirm Petlechkov's convictions on Counts 6, 13, and 19, and dismiss all remaining counts without prejudice. We need not address Petlechkov's challenges to his sentence and the restitution award because the district court will need to both resentence Petlechkov and recalculate that award.
See
Hughey v. United States
,
We AFFIRM in part, REVERSE in part, and REMAND for proceedings consistent with this opinion.
Reference
- Full Case Name
- UNITED STATES of America, Plaintiff-Appellee, v. Dimitar PETLECHKOV, Defendant-Appellant.
- Cited By
- 25 cases
- Status
- Published