United States v. Richter

796 F.3d 1173

UNITED STATES of America, Plaintiff–Appellee

v.Brandon RICHTER, Defendant–Appellant.

United States of America, Plaintiff–Appellee

v.Tor Olson, Defendant–Appellant.

Nos. 13–1316

13–1319.

United States Court of Appeals, Tenth Circuit.

July 31, 2015.

Dean Neuwirth, Dean Neuwirth, P.C. (Keyonyu X O'Connell of The Law Office of Keyonyu X O'Connell, with him on the briefs), Denver, CO, for Defendant–Appellant Richter.

William J. Leone (Alex W. Trautman, with him on the briefs), Fulbright & Jaworski, LLP, Denver, CO, for Defendant–Appellant Olson.

Robert Mark Russel, Assistant United States Attorney (John F. Walsh, United States Attorney, with him on the briefs), Denver, CO, for Plaintiff–Appellee.

Before KELLY, LUCERO, and McHUGH, Circuit Judges.

I. INTRODUCTION

McHUGH, Circuit Judge.

This case arises out of Brandon Richter and Tor Olson's business selling electronic devices for export overseas. The government brought criminal charges against Mr. Richter and Mr. Olson for fraudulently obtaining the electronic devices they exported and for violating federal law governing the exportation of hazardous electronic waste. After a fifteen-day trial, the jury found them guilty of committing fraud and facilitating the illegal exportation of hazardous waste, and it also convicted Mr. Richter on a single count of obstruction of justice. On appeal, Mr. Richter and Mr. Olson raise a variety of legal and evidentiary challenges to these convictions. Exercising jurisdiction under 28 U.S.C. § 1291, we AFFIRM in part and REVERSE in part.

II. BACKGROUND

A. Factual History

Mr. Richter and Mr. Olson served, respectively, as the Chief Executive Officer and Vice President of Operations for Executive Recycling, Inc. (Executive), a waste removal and recycling business. The company, founded in 2004 by Mr. Richter, provided electronic waste removal and recycling services to various businesses, governments, and government entities in Colorado, Utah, and Nebraska. Specifically, the defendants¹ promised potential customers that Executive would domestically recycle or destroy electronics that could not be resold and would do so in an environmentally friendly manner that complied with all environmental laws and regulations governing electronic waste.

Generally speaking, electronic waste, or e-waste, refers to used electronics such as computers, printers, keyboards, speakers, and phones that are destined for disposal or recycling. Proper disposal of these types of electronic devices, whether by resale, by destruction, or by reduction to raw materials that can be resold, is difficult and expensive because the devices contain toxic materials. For example, Cathode Ray Tubes (CRTs) are “the glass video display component of an electronic device, usually a computer or television monitor, and are known to contain lead.” CRTs cannot be disposed of in a landfill because of the risk that the lead will leach into the soil.

Executive contracted to dispose of e-waste for a number of government and business entities in Colorado, including the City and County of Boulder, the City and County of Broomfield, the Denver Newspaper Agency, El Paso County, and the Jefferson County School District. The defendants promised these customers that any electronic devices delivered to Executive would not be shipped overseas, would be processed in the United States, and would be totally destroyed in compliance with all environmental laws.

Contrary to its promises, Executive sold many items for overseas export to Hong Kong and China. Between 2005 and 2008, Executive served as the exporter of record in over three hundred exports and received over $1.9 million from its top five brokers in exchange for used electronics. Of particular relevance, the company sold CRTs to brokers in China for eventual reuse or refurbishment as components in new monitors. Over a four-year period, Executive sold 142,917 CRTs to their top five overseas brokers.

One shipment to Hong Kong, the “GATU shipment,” contained CRTs that were broken and did not work, and thus could not be reused. The GATU shipment was featured in an episode of a television news program, 60 Minutes, which called into question Executive's compliance with environmental statutes and regulations. The program also brought Executive to the attention of the authorities.

As a result, the Environmental Protection Agency (EPA), Immigration and Customs Enforcement (ICE), and the Colorado Attorney General's Office began investigating Executive. An EPA investigator asked Mr. Richter to supply records of Executive's shipments over a three-year period. In response, Mr. Richter provided only a handful of records. One was a record corresponding to the GATU shipment. The subsequent execution of a federal search warrant revealed more shipping records that Mr. Richter had not produced. Some of these documents, including the original record for the GATU shipment, had been shredded. Upon closer inspection, EPA investigators discovered that the GATU record previously produced by Mr. Richter had been altered before it was provided to the EPA.

B. Procedural History

In the United States District Court for the District of Colorado, the government charged Executive, Mr. Richter, and Mr. Olson with thirteen counts of mail and wire fraud, in violation of 18 U.S.C. §§ 1341 and 1343 ; one count of exporting hazardous waste in violation of the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. § 6928(d) ; and one count of smuggling hazardous waste, in violation of 18 U.S.C. § 554 and the same RCRA provision. According to the government, the defendants violated environmental laws regulating hazardous waste when they exported the CRTs (both broken and intact) overseas, and their actions in shipping the CRTs overseas were contrary to the representations made to customers. The government also charged Mr. Richter and Mr. Olson with obstruction of justice, in violation of 18 U.S.C. § 1519.

Before trial, the defendants moved for dismissal of the mail and wire fraud charges, arguing that the indictment failed to allege a deprivation of money or property as required by 18 U.S.C. §§ 1341 and 1343. Specifically, the defendants argued that Executive's customers were not deprived of money because they obtained the benefit of the services they paid for—removal of e-waste—and they were not deprived of property because the e-waste had no value in the hands of the customers. The district court denied the motions.²

The parties also raised pretrial motions concerning the jury instructions on the RCRA and smuggling charges. Both of these criminal charges were based on the government's allegations that the defendants had exported, and facilitated the export of, regulated “hazardous waste” in violation of federal law. The parties' disagreement with respect to the jury instructions focused on the proper definition of waste under Colorado law.³ The government argued the jury should be instructed on the relevant regulations, as well as the Colorado Department of Public Health and Environment's (the Department) guidance interpreting those regulations, while the defendants claimed only the regulation should be included in the jury instruction. The district court agreed with the government that the Department's interpretation of the regulation was “relevant to the jury's determination of whether the electronic materials at issue in this case were waste.” It therefore adopted a waste instruction, which stated that a used electronic device or component becomes waste on the date that a recycler determines it cannot be resold, donated, repaired, refurbished, or reused for its original intended purpose.

At trial, the defendants continued to challenge the government's allegation that they violated the law by exporting hazardous waste. First, Mr. Richter and Mr. Olson asserted that even if broken CRTs are regulated waste, they did not know Executive's shipments contained broken CRTs. In support of this theory, Mr. Olson offered three e-mails as evidence that he was not responsible for loading CRTs into shipping containers and that he had taken measures to prevent Executive's employees from breaking CRTs while packing them for export. The district court sustained the government's hearsay objection to these e-mails, but allowed Mr. Olson to testify about their content.

Second, the defendants challenged the government's allegation that Executive's shipment of intact CRTs also violated the relevant environmental laws. According to the defendants, these CRTs could not constitute waste, even under the government's definition, because they were sold for reuse in new television monitors, which is a use consistent with the CRTs' original intended purpose. In rebuttal, the government offered testimony from Edward Smith, an employee of the Department, who claimed a CRT re-housed in another monitor is waste because the reuse requires “processing.”

Following trial, the jury returned verdicts against Mr. Richter and Mr. Olson on six counts of wire fraud, one count of mail fraud, and one count of smuggling.⁴ It also found Mr. Richter guilty of obstructing justice based on his response to the EPA's request for documents. The district court sentenced Mr. Richter to thirty months' imprisonment, three years' supervised release, and ordered him to pay $70,144 in restitution. The court sentenced Mr. Olson to fourteen months' imprisonment, three years' supervised release, and ordered him to pay $17,536 in restitution. The defendants filed this timely appeal.

III. DISCUSSION

Mr. Richter and Mr. Olson raise several challenges to their convictions.⁵ First, they ask us to reverse their convictions for smuggling because the jury instruction defining waste was incorrect as a matter of law and violated their due process right to fair notice of criminal prohibitions. Regarding the mail and wire fraud convictions, Mr. Richter and Mr. Olson argue, as they did before the district court, that their customers were not deprived of money...