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United States v. Christy

United States District Court, D. Kansas

May 1, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
DENISE CHRISTY (01), Defendant.

          MEMORANDUM AND ORDER

          Daniel D. Crabtree United States District Judge

         On January 12, 2017, a jury convicted defendant Denise Christy of 19 counts: (1) one count of bank embezzlement in violation of 18 U.S.C. § 656; (2) six counts of falsification of bank records in violation of 18 U.S.C. § 1005; (3) six counts of filing false income tax returns in violation of 26 U.S.C. § 7206(1); and (4) six counts of conducting or attempting to conduct a financial transaction involving the proceeds of specified unlawful activity with the intent to engage in conduct violating section 7201 or 7206 of the Internal Revenue Code of 1986- conduct that constitutes a violation of 18 U.S.C. § 1956.

         Ms. Christy has filed a Motion for Judgment of Acquittal (Doc. 59) and Motion for New Trial (Doc. 60). The government has responded to both motions (Doc. 61). After carefully considering the facts and arguments presented by the parties, the court denies both motions. In short, the government presented evidence sufficient for a rational jury to find Ms. Christy guilty beyond a reasonable doubt of the 19 counts of conviction. Ms. Christy also has failed to show that the ends of justice require a new trial.

         I. Factual and Procedural Background

         The government presented the following evidence, among other things, at trial. Ms. Christy was employed by Central National Bank (“CNB”) at its branch located in Burlington, Kansas. She reported to the branch manager, Elaine Gifford. In 2013, Steve Snook, a Director of CNB, expressed concern to Ms. Gifford about the amount of money in the Burlington branch's vault. The branch's records showed it was carrying amounts up to $1, 000, 000. Mr. Snook believed that amount was greater than necessary, posing a security risk and a lost opportunity for the bank to earn interest on the money it invested in some other account. Mr. Snook thus directed Ms. Gifford to reduce the amount of cash in the vault to $500, 000 in the coming weeks. In turn, Ms. Gifford asked Ms. Christy to start selling cash to the Federal Reserve Bank to reduce the amount of money in the branch's vault.

         A few months later, Lisa Nabus, a CNB employee tasked with reviewing the bank's sales of cash to the Federal Reserve Bank, began to notice discrepancies in cash out tickets prepared by Ms. Christy. The cash out tickets represented that the Burlington branch had made sales of cash to the Federal Reserve Bank, but the amounts reported by Ms. Christy either never arrived at the Federal Reserve Bank, or they arrived in smaller amounts than those reported on the cash out tickets. Ms. Nabus communicated with Ms. Christy about these discrepancies on many occasions.

         On December 17, 2013, Ms. Christy prepared a cash out ticket representing that the branch had sold $401, 000 to the Federal Reserve Bank. Nine days later, Ms. Christy contacted Ms. Nabus to report that she had incorrectly reported the amount. Instead, Ms. Christy had sold just $104, 000 to the Federal Reserve Bank. Ms. Nabus instructed Ms. Christy to run an adjustment at the branch to correct the error.

         On January 14, 2014, Ms. Christy prepared a cash out ticket representing that the branch had sold $400, 000 to the Federal Reserve Bank. After Ms. Nabus realized that the Federal Reserve Bank never credited CNB for the $400, 000, she contacted Ms. Christy asking if she was aware of any issues with the shipment. Ms. Christy apologized and explained that she never should have run the cash out ticket because the branch never sold the money. Ms. Christy offered to run the appropriate correction, but did not do so immediately. After several inquiries from Ms. Nabus, Ms. Christy finally made the appropriate correction on February 21, 2014.

         On February 25, 2014, Ms. Christy prepared a cash out ticket representing that the branch had sold $562, 000 to the Federal Reserve Bank. Ms. Nabus determined that the Federal Reserve Bank never credited CNB for the $562, 000. So, she contacted Ms. Christy about the discrepancy. Ms. Christy acknowledged that the branch never sent the money to the Federal Reserve Bank. Ms. Christy eventually corrected the error on March 18.

         On March 18, 2014, Ms. Christy prepared three separate cash out tickets representing that the branch had sold $270, 000, $225, 000, and $225, 000, to the Federal Reserve Bank. Ms. Nabus determined that the Federal Reserve Bank never credited CNB for the amounts reported on each of the three cash out tickets. So, again, Ms. Nabus contacted Ms. Christy about these discrepancies. Ms. Christy said she would look into the matter, and later responded that the amounts reported were an error. She offered to correct them.

         On April 22, 2014, Ms. Christy prepared a cash out ticket representing that the branch had sold $401, 000 to the Federal Reserve Bank. After Ms. Nabus determined that the Federal Reserve Bank has credited CNB for just $101, 000, she contacted Ms. Christy. Ms. Christy conceded that the $401, 000 reported on the cash out ticket was an error, and, again, she said she was in the process of fixing it.

         While working with Ms. Christy to resolve these issues, Ms. Nabus began to grow concerned about the repeated errors she was finding. She thought something didn't feel right. So, Ms. Nabus reported her concerns to Vicky Farres, an auditor employed by CNB. In response to Ms. Nabus' report, Ms. Farres conducted a surprise audit of the vault at the Burlington branch on May 21, 2014. According to the bank's accounting report, the vault should have contained $883, 320 in cash on the day of the surprise audit. The report is generated by a software system that the bank uses to track vault transactions and sales of cash to the Federal Reserve Bank. The amount reported by the system is based on information that Ms. Gifford and Raylene Thorne (another CNB employee at the Burlington branch and Ms. Christy's sister-in-law) input into the system electronically. Ms. Gifford and Ms. Thorne both testified at trial that the information they put into the electronic system was based on calculator tapes that Ms. Christy gave to them.

         The May 21 surprise audit revealed that the vault was $770, 000 short of the amount reflected in the bank's accounting records. Ms. Farres testified at trial about that audit. She described Ms. Christy as nervous, but Ms. Farres also recognizes that nervousness is a typical response for employees when an auditor arrives at the bank. Ms. Farres described other behavior of Ms. Christy that she thought was strange. For example, Ms. Christy delayed the start of the audit. Ms. Farres had to ask her more than once to get started on the count. Then, after Ms. Christy started counting the money, Ms. Farres saw that she was attempting to return unstrapped money to the vault after Ms. Farres had counted it. By doing this, Ms. Farres could not tell whether Ms. Christy was taking money from the vault that they already had counted and thus disrupting the count. Ms. Christy also claimed that $100, 000 (in $100 dollar bills) had fallen down a small crack between the cash vault and the wall. Ms. Farres retrieved a flashlight and looked down the crack. She found nothing there.

         When Ms. Farres had completed the audit and determined that the vault was missing $770, 000, she asked Ms. Christy where the missing money was located. Ms. Christy said that she thought she had sold it to the Federal Reserve Bank on May 20, 2014. So, Ms. Farres then asked Ms. Christy to produce the receipt from Garda (the private security firm that CNB hires to transport currency to the Federal Reserve Bank) showing that Garda had picked up the $770, 000 for transport the previous day. Ms. Christy said Garda never provided her with a receipt.

         But, the following day, Ms. Christy emailed three Garda receipts to Ms. Gifford. The three receipts reflected three separate deposits that the branch purportedly had entrusted to Garda-one in the amount of $90, 000, a second in the amount of $100, 000, and a third in the amount of $670, 000. Although Ms. Christy had said the day before that Garda never gave her receipts, she explained in the email to Ms. Gifford that she hadn't even thought about having the Garda receipts during the audit. She said that she had found the receipts when she was going through a drawer.

         The government asserted at trial that Ms. Christy had fabricated two of the three receipts. The government contends that the $90, 000 receipt is a bona fide receipt for cash that the branch actually entrusted to Garda on May 20, 2014, to transport to the Federal Reserve Bank.[1] But the government asserts that Ms. Christy fabricated the $100, 000 and $670, 000 receipts to conceal the $770, 000 that was missing from the vault. The government supported this assertion with the following evidence.

         First, the government presented the original bona fide cash out ticket showing that the branch had sold $90, 000 to the Federal Reserve on May 20, 2014. This original ticket bears a “proof strip” showing the date when the money was sold to the Federal Reserve Bank. A proof machine applies the proof strip, and no one can change the information on it. The original bona fide cash out ticket showing the $90, 000 sale bears a proof strip showing the sale date as May 20, 2014. The government also presented the cash out ticket for the purported sale of $770, 000 to the Federal Reserve Bank. Ms. Christy prepared the ticket-it bears her initials. The ticket also bears a proof strip showing the date of the sale as May 21, 2014-the day after the $90, 000 sale and the same day as the surprise audit.

         Second, the bank never located the originals of the two Garda receipts showing the $100, 000 and $670, 000 amounts. However, the bank did find the original Garda receipt showing the $90, 000 that Garda picked up on May 20, 2014. Another bank employee testified that she found the $90, 000 receipt under the mouse pad on Ms. Christy's desk after the bank had placed Ms. Christy on leave.

         Third, the government produced a transparency of the bona fide $90, 000 Garda receipt. The bottom of the $90, 000 receipt bears the signatures of Ms. Christy and Adam Lewis, the Garda employee who picked up the cash on May 20, 2014. The government placed the transparency over the $100, 000 and $670, 000 receipts, and the signatures match exactly. The government asserted that it is impossible, without falsification, to have two signatures on three documents match perfectly.

         Fourth, the original $90, 000 Garda receipt bears the bag number of the delivery- 02755778. A CNB employee testified that the bank uses sequentially ordered bags. The bag numbers on the $100, 000 and $670, 000 Garda receipts are indecipherable. The government asserted that Ms. Christy had obliterated the numbers to conceal her fabrication. When one places the transparency over the $100, 000 and $670, 000 receipts, the receipts bear the same obliterations on their respective bag numbers. Also, the Garda employee, Adam Lewis, testified that he never would have presented the bank with receipts containing obliterated bag numbers.

         Finally, the government presented surveillance photographs of Mr. Lewis leaving the bank on May 20, 2014. In the photos, Mr. Lewis is pushing a two-wheeled hand truck with a single bank bag hanging on the handles. Mr. Lewis confirmed that the photos showed him picking up the $90, 000 that he transported on May 20, 2014. Another bank employee testified that she examined the surveillance videos, and she saw Mr. Lewis come inside and leave the bank just this one time with this one load. For demonstrative purposes, the government presented a photograph of a two-wheeled hand truck containing $860, 000 in the same denominations that Ms. Christy claimed she had delivered to Garda on May 20, 2014. The government asked the jury to compare the noticeable differences between the two-wheeled hand truck containing $90, 000-as shown in the surveillance photos-and the one containing $860, 000 that the government presented for demonstrative purposes.

         The government also presented evidence at trial of unexplained cash deposits that Ms. Christy made into her own bank accounts between 2008 and 2013. The government submitted Ms. Christy's tax returns for 2009 through 2014. The tax returns identified Ms. Christy and her husband's W-2 earnings as a source of income. Ms. Christy also earned a modest income from Mary Kay sales. And, Mr. and Ms. Christy reported some income from their farm, but for the years 2008 through 2013, they reported the farming operation as a loss. None of these reported income streams could account for the more than $400, 000 in cash deposits from undisclosed sources that Ms. Christy made into her personal bank accounts during that time.

         At the trial's conclusion, the jury deliberated and returned guilty verdicts for 19 of the 23 counts the government had charged in the Indictment. The jury acquitted Ms. Christy of four counts charging her with money laundering. But the jury convicted Ms. Christy of one count of bank embezzlement, six counts of falsification of bank records, six counts of filing false income tax returns, and six counts of money laundering. Ms. Christy now asks the court to enter a judgment of acquittal, or alternatively, grant a new trial.

         II. Motion for Judgment of Acquittal

         A. Legal Standard

         On a motion for judgment of acquittal under Fed. R. Crim. P. 29(c), the court must uphold the jury's verdict of guilty if “any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” United States v. Haber, 251 F.3d 881, 887 (10th Cir. 2001) (citation and internal quotation marks omitted). Put another way, the court will reverse a jury's verdict only if no reasonable juror could have found the defendant guilty. United States v. Dewberry, 790 F.3d 1022, 1028 (10th Cir. 2015); United States v. Magleby, 241 F.3d 1306, 1312 (10th Cir. 2001).

         When reviewing a defendant's sufficiency of the evidence claim, the court “must ask only whether taking the evidence-both direct and circumstantial, together with the reasonable inferences to be drawn therefrom-in the light most favorable to the government, a reasonable jury could find [defendant] guilty beyond a reasonable doubt.” Magleby, 241 F.3d at 1311-12 (citation and internal quotation marks omitted). “[T]he evidence necessary to support a verdict need not conclusively exclude every other reasonable hypothesis and need not negate all possibilities except guilt.” Id. at 1112 (citation and internal quotation marks omitted). And “where conflicting evidence exists” the court must “not question the jury's conclusions regarding the credibility of witnesses or the relative weight of evidence.” Id. Instead, the court simply must “determine whether [the] evidence, if believed, would establish each element of the crime.” United States v. Vallo, 238 F.3d 1242, 1247 (10th Cir. 2001) (quoting United States v. Evans, 42 F.3d 586, 589 (10th Cir. 1994)). The court thus must give “considerable deference to the jury's verdict.” Dewberry, 790 F.3d at 1028 (citation and internal quotation marks omitted). But, while the court's review ...


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