United States v. Michael I. Monus

OPINION

Defendant Michael Monus was convicted on all counts of a 109 count indictment that charged him with conspiracy to commit mail fraud, wire fraud, bank fraud, and transportation of funds obtained by theft or fraud under 18 U.S.C. § 371 (count one); with bank fraud under 18 U.S.C. § 1344 (counts two and three); with wire fraud under 18. U.S.C. § 1343 (counts four, five, eight, ninety-one, and ninety-two); with mail fraud under 18 U.S.C. § 1341 (counts six and seven); with interstate transportation of property obtained by theft or fraud under 18 U.S.C. § 2314 (counts nine through ninety, and ninety-three through 106); with filing false income tax returns under-26 U.S.C. § 7206(1) (counts 107 and 108); and with obstruction of justice under 18 U.S.C. § 1503 (count 109). Defendant raises several assignments of error. For the following reasons, we affirm defendant’s convictions on all counts, vacate *381 his sentence, and remand to the District Court for sentencing consistent with this opinion.

I. Facts

Defendant was the President and Chief Operating Officer of Phar-Mor, Inc. (“Phar-Mor”), a retail discount drugstore chain based in Youngstown, Ohio. David Shapira was the Chief Executive Officer of Phar-Mor, as well as being Chief Executive Officer of Giant Eagle, Phar-Mor’s parent company and majority stockholder. Giant Eagle also owned, Tamco, Inc. (“Tamco”), which was one of Phar-Mor’s major suppliers. Phar-Mor opened its first store in 1982 and expanded rapidly over the next decade. By 1988, it had opened eighty-one stores and had over one half of a billion dollars in annual sales. By July 1992, it had more than 300 stores located in thirty states and had gross revenues of $2.8 billion. Phar-Mor, however, began to experience financial difficulties in January of 1988. Initially, the most serious problem was a one to two percent decline in Phar-Mor’s gross margin. 1 An investigation into the causes of this decline revealed that Tamco was shipping less merchandise than it was billing Phar-Mor. After this deficiency was discovered, Giant Eagle agreed to pay Phar-Mor seven million dollars on behalf of Tamco in mid-1988. Phar-Mor later bought Tamco from Giant Eagle in an additional effort to solve the inventory and billing problems. The monetary settlement with Giant Eagle and Tamco did not halt the decline in Phar-Mor’s gross margin. The accounting department, headed by Patrick Finn, Phar-Mor’s Chief Financial Officer, created weekly reports indicating the company’s gross margin results. In early 1989, Finn showed defendant reports revealing that the gross margin remained disappointing. Defendant instructed Finn not to report the actual gross margin to the board of directors or to Shapira. At this point, defendant apparently was concerned that Giant Eagle would demand repayment of some of the seven million dollar settlement if it discovered that Tamco was not responsible for all of Phar-Mor’s problems. According to Finn’s testimony, defendant decided to alter the company’s gross margin figures, inflating them to match historically expected margins, thereby understating losses and reflecting nonexistent profits.

Defendant continued to alter the weekly gross margin reports himself for a period of several months. He then instructed Finn to carry out the alterations himself. As soon as defendant and Finn started to alter the gross margin reports, they began to generate two sets of weekly financial reports — one containing the false, altered numbers and another containing the real numbers. The difference between the real and falsified figures were tallied in a separate account called the “bucket” or “subledger.” The falsified reports understated liabilities and overstated earnings, and the subledger contained net losses. Because defendant and Finn distributed the false financial report to David Shapira and the Giant Eagle board of directors, it became known as the David Report.

Defendant and Finn also submitted these false financial statements to Pittsburgh National Bank, which increased a revolving credit line for Phar-Mor from $435 million to $600 million in March 1992; to Corporate Partners, an investment group that bought $200 million in Phar-Mor stock in June 1991; to Chemical Bank, which served as the placing agent for $155 million in ten-year senior secured notes issued by Phar-Mor; to Westinghouse Credit Corporation, which had executed a $50 million loan commitment to Phar-Mor in 1987; and to National Westminster Bank, which served as the placing agent for $112 million in Phar-Mor stock sold to various financial institutions in the fall of 1991. The submission of these fraudulent statements -to these financial institutions forméd the basis for the bank fraud, wire fraud, and mail fraud counts of defendant’s indictment.

Defendant and Finn had to come up with a way to conceal the losses contained in the subledger. In the beginning, defendant in-’ *382 strueted Finn to offset losses in the subledger with “exclusivity funds”- — large payments that suppliers made to Phar-Mor for the exclusive right to supply its stores with particular types- of merchandise for a number of years. At the end of the fiscal year 1989, defendant and Finn had offset all the losses in the subledger in this manner. The David Reports, however, were still materially false, because the handling of the exclusivity money understated liabilities and overstated income. 2 According to Finn, defendant and he now feared that they would lose their jobs if the falsification were uncovered.

In fiscal year 1990, defendant and Finn hid other items in the subledger. For example, Phar-Mor had a joint advertising plan with some of its suppliers, which it called the “Power Plan.” In 1990, when the Power Plan generated less income than was expected, the falsified financial statements reported the expected income and the shortfall went in the subledger. Defendant and Finn treated shortfalls in merchandise rebates from suppliers in the same manner. In addition, the subledger included unauthorized payments to the World Basketball League (“WBL”), a financially troubled professional sports league, in which defendant had invested heavily and of which, he was the majority owner. Defendant initially told Finn that he would repay the money with corporate sponsorships for the WBL that Phar-Mor buyers would solicit from suppliers. Payments from Phar-Mor to the WBL totaled $5.5 million in fiscal year 1991 and ultimately totaled approximately $8.8 million before this scheme was discovered. Over the course of 1990 and 1991, the subledger also concealed $568,000 in unauthorized Phar-Mor checks written to defendant or for his direct benefit.

By. June 30, 1990, the subledger contained concealed losses at Phar-Mor totaling $38.5 million. In order to hide these losses from year-end auditors, defendant and Finn .added $200,000 to the inventory account of each store that they knew would not be audited. For the time being they escaped detection. One year later, the subledger had grown to $148 million. Finn testified that-he regularly discussed the size of the subledger with defendant. Jeffrey Walley, the vice-president of Phar-Mor, testified that from July 1990 to July 1991 he discussed the company’s concealed losses with Finn and defendant between five and ten times.

In the fall of 1991, Stan Cherelstein became Phar-Mor’s controller. John Anderson, the accountant at Phar-Mor who began preparing the subledger report in early fiscal year 1990, informed Cherelstein of the subledger. Cherelstein immediately objected to the existence of the subledger and demanded a meeting with defendant. In December 1991, defendant, Finn, Cherelstein, and Anderson held a meeting, where they discussed the losses and the payments to the WBL that had been concealed in the sub-ledger. At this time, the subledger contained approximately $150 million, including almost $9 million in cheeks written to the WBL. At this meeting, defendant acknowledged his debt to Phar-Mor for the payments to the WBL and indicated that he would repay the company.

The size of the subledger continued to increase, even after this December 1991 meeting. As a result, Cherelstein demanded a second meeting in April 1992. Defendant, Finn, Anderson, Walley, and Cherelstein attended. Cherelstein secretly tape-recorded the meeting; the recording was played for the jury at defendant’s trial and introduced as evidence.

In July 1992, Finn voluntarily exposed this fraudulent scheme to the United States Attorney in Cleveland, Ohio. Finn 'and Walley ultimately pleaded guilty to various charges." Defendant was' first indicted in January 1993 on 129 counts of fraud, money laundering, and conspiracy. The case went to trial but' resulted in a mistrial. On July 21, 1994, a 109-count superseding indictment was returned against defendant. Following a jury trial that lasted one month, defendant was convicted on all counts. The court imposed a *383 sentence of 235 months imprisonment and a fine of one million dollars.

II. Discussion

On appeal, defendant argues that numerous errors at trial require a judgment of acquittal on count 109, reversal of his convictions on all counts, or in the alternative, vacation of his sentence and a remand to the District Court for re-sentencing. In particular, defendant raises the following claims: first, that there was insufficient evidence to support his convictions for ninety-six counts of interstate transportation of property obtained by theft or fraud; second, that his convictions for filing false income tax returns should be reversed because of insufficient evidence, improper testimony by expert witnesses, and jury instructions that amounted to plain error; third, that he is entitled to a judgment of acquittal on the one count of obstructing the due administration of justice because the indictment was insufficient, the evidence was insufficient to support a conviction, and the jury instructions amounted to plain error; fourth, that all of his convictions should be reversed because the inclusion of a jury instruction on deliberate ignorance was plain error; fifth, that his conviction on the conspiracy count should be reversed because the jury instructions were plain error; sixth, that a re-trial is required because the District Court improperly admitted statements made by Joel Arnold as statements made by a co-conspirator, under Fed.R.Evid. 801(d)(2)(E); seventh, that prosecutorial misconduct, including improper comments on defendant’s decision not to testify at trial, requires reversal of all his convictions; and eighth, that, at the least, his sentence should be vacated because the District Court violated Fed.R.Crim.P. 32(c)(1), improperly added four enhancement levels under the United States Sentencing Guidelines, misapprehended its power to depart downward from the Guidelines, and erred in imposing a one million dollar fine. We consider each of his claims in turn.

A. Interstate Transportation of Property Obtained by Theft or Fraud

(Counts Nine to Ninety, and Ninety-Three to 106)

Defendant was charged and convicted of ninety-six separate violations of 18 U.S.C. § 2314. 3 . Each count represented a separate unauthorized cheek that defendant caused to be issued from a Phar-Mor account. The eighty-two checks that form the basis for counts nine through ninety represent approximately $8.8 million in unauthorized payments that defendant caused to be made from Phar-Mor to the WBL. Counts ninety-three through 106 represent fourteen Pharmor checks, totaling approximately $568,000, written to defendant or for his direct benefit. Defendant argues that the evidence at trial was insufficient to establish that the property involved in these counts was stolen or taken by fraud and that he knew this to be so.

We review allegations of insufficient evidence to determine “whether after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential eléments of the crime beyond a reasonable doubt.” United States v. Elder, 90 F.3d 1110, 1120 (6th Cir.1996) (citing Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979)). We also resolve all. conflicts in testimony and draw every reasonable inference in the government’s favor. United States v. Bashaw, 982 F.2d 168, 171 (6th Cir.1992). “The government may meet its burden through circumstantial evidence alone, and such evidence need not exclude every possible hypothesis except that of guilt.” United States v. Jackson, 55 F.3d 1219, 1225 (6th Cir.1995).

*384 To prove a violation of 18 U.S.C. § 2314, the government must prove the following essential elements:

(1) transporting, or causing the transportation, (2) in interstate commerce, (3) of property valued at $5,000 or more, (4) with knowledge that is has been stolen, converted, or fraudulently taken from its rightful owner.

United States v. Weiner, 755 F.Supp. 748, 752 (E.D.Mich.1991), aff'd, 988 F.2d 629 (6th Cir.), cert. denied, 510 U.S. 848, 114 S.Ct. 142, 126 L.Ed.2d 105 (1993).

Defendant argues that for each count under § 2314 the government failed to put forth sufficient evidence regarding the fourth element, whether that particular check represented money that was stolen, converted, or fraudulently taken, and whether defendant had knowledge of this. With respect to counts nine through ninety, defendant argues that the government failed to show in sufficient detail that at the specific time Phar-Mor issued each of the eighty-two checks to the WBL, it was not covered by funds that Phar-Mor had received or were receivable from corporate sponsors on behalf of the WBL. With respect to counts ninety-three to 106, defendant argues that the government failed to prove that each check “was not a proper payment or advance, or that it-was not due and owing at the time of payment.” We find these arguments to be without merit.

It is uncontested that defendant had invested heavily in the WBL since its founding in 1988, owned a team, the Youngstown Pride, and was the majority owner of the league itself. Finn testified that he assisted defendant in securing over $3.5 million in personal lines of credit and other financing, which defendant used to fund the Youngstown Pride and other WBL teams. Despite defendant’s financial support, the league kept losing money. Defendant turned to Phar-Mor for financial help.

Finn testified at trial that Phar-Mor was authorized tq spend $65,000 a year to sponsor the Youngstown Pride by advertising at its games and in its programs. Charity Imbrie, Senior Vice President, General Counsel, and Corporate Secretary of Giant Eagle, and Farrell Rubenstein, a member of Phar-Mor’s Board of Directors and Chairman of its Audit Committee, testified that Phar-Mor was authorized to spend only $50,000 in sponsorship of the Youngstown Pride. Despite these limits to his authority, defendant directed large sums of money from Phar-Mor to the WBL. From October 1989 through February 1992, defendant directed Finn to write eighty-two Phar-Mor checks, totaling approximately $8.8 million, to the WBL.

Finn, Walley, Anderson, and Cherelstein all testified at trial to the elaborate means that they developed with defendant to conceal these payments from Shapira, the Boards of Directors of Giant Eagle and Phar-Mor, and others. Finn and Walley both testified that the checks were typewritten, instead being processed by Phar-Mor’s computer system, in order to avoid detection and prevent leaving a trail for auditors. Anderson testified that the payments were tracked in a “dead account” in the subledger titled “KBL receivable.” These payments' were further concealed when the entire sub-ledger was effectively erased by adding hundreds of thousands of dollars to individual stores’ inventory accounts. Stan Cherelstein, Phar-Mor’s Controller, testified that defendant told him that he would repay the almost nine million dollars that Phar-Mor had paid to the WBL with funds from the financing of a proposed plan to purchase the Denver Nuggets of the National Basketball Association. Charity Imbrie testified, however, that when defendant should have disclosed all payments that Phar-Mor made to the WBL, he only disclosed an annual $50,-000 advertising expenditure by Phar-Mor to the Youngstown Pride. Rubenstein testified the had also questioned defendant about related-party transactions, specifically about Phar-Mor’s relationship with the WBL. Rubenstein testified that defendant denied that Phar-Mor buyers were soliciting WBL sponsorships from Phar-Mor vendors and did not disclose any payments other than the authorized $50,000 advertising expenditures.

Counts ninety-three through 106 relate to fourteen Phar-Mor checks, amounting to approximately $568,000, paid directly to *385 defendant or for his personal benefit. Finn testified at trial that these checks, which paid for such items as an addition to defendant’s personal residence and a diamond engagement ring, were hand written and hidden in various accounts just as the WBL payments had been. Finn also testified that each payment was in addition to the authorized compensation that defendant received, that none of these payments was authorized, and that none was reported on his earnings statements. One of the checks was recorded as an advance on a sale of Phar-Mor stock by defendant. Trial testimony showed that when the sale was completed, Finn asked defendant for the money, but defendant refused to repay the advance.

Viewing this evidence in the light most favorable to the government, we hold that it was sufficient to allow any rational juror to find the essential elements of counts nine through ninety and ninety-three through 106 beyond a reasonable doubt.

B. Convictions for Filing False Tax Returns

(Counts 107 and 108)

Defendant was convicted, under 26 U.S.C. § 7206(1), 4 of filing false personal income tax returns for 1990 and 1991. These charges resulted from defendant’s failure to report as income the money that he embezzled from Phar-Mor through checks paid to the WBL, checks paid to himself, and checks paid to third parties for his benefit. He argues that the following errors require reversal of these eonvictions: first, that the evidence was insufficient to establish that he knew any of thé omitted items were required to be included as income; second, that the expert testimony of I.R.S. Agent Kurzweil invaded the province of the jury to decide the facts underlying the charge; and third, that the jury instructions for counts 107 and 108 deprived him of his Sixth Amendment right to a jury trial. We consider these claims in turn.

1. Sufficiency of the Evidence

The record is devoid of evidence that defendant raised these sufficiency of the evidence claims before the District Court. Neither defendant’s -motion for judgment of acquittal made under Fed.R.CrimP. 29 at the end of the- Government’s, case and renewed after trial, nor his motion, for a new trial made pursuant to Fed.R.CrimP. 33 after trial, specifically contested the sufficiency of the evidence claim regarding Counts 107 and 108. Under United States v. Carr, 5 F.3d 986, 991 (6th Cir.1993), defendant has failed to preserve these issues for review on appeal. Therefore, we do not reach the merits of these claims. 5

2. Ultimate Issue Testimony

IRS Revenue Agent Bradley Kurzweil testified at trial as an expert witness for the government regarding the two tax counts. Defendant argues that Kurzweil intruded on the province of the jury by testifying to underlying factual issues and offered impermissible opinions on a legal question. *386 Defendant objects to the following trial testimony:

Q: If you assume that funds have been taken from Phar-Mor, which are not authorized, if you assume that those funds have been diverted to the World Basketball League, and assuming that is an entity owned by Mr. Monus, and you assume a specific amount of funds that have .been diverted, what is the impact of those funds on Mr. Monus’ tax liabilities for 1990 an 1991?

A: The dollar amount would be taxable to him in each year.

This testimony did not usurp the function of the jury. Kurzweil did not give his opinion about whether or not defendant was guilty; he merely gave his opinion that the events assumed in the question would trigger tax liability. Such testimony is permissible as an expert opinion to help the jury determine a fact in issue. See United States v. DeClue, 899 F.2d 1465, 1473 (6th Cir.1990) (finding that expert testimony of IRS agent regarding tax liability did not usurp function of jury because agent did not give her opinion about guilt of defendant).

Defendant’s arguments that Kurzweil’s testimony was an impermissible opinion on a legal question are also without merit. Defendant relies on United States v. Zipkin, 729 F.2d 384 (6th Cir.1984), where we held that it was impermissible for a judge to delegate the responsibility of deciding the law of the case “to a jury through the submission of testimony on controlling legal principles.” Id. at 387. That did not occur in this case. Kurzweil did not give a legal opinion that necessarily determined the guilt of defendant or instructed the jury on controlling legal principles. He merely gave his opinion as to whether particular payments under assumed circumstances would be taxable. The jury still had to decide whether the defendant actually stole funds from Phar-Mor and knowingly failed to report them as income before it could conclude that defendant was guilty.

3. Error in Jury Instructions

Defendant argues that the District Court’s instructions to the jury regarding the tax counts violated his Sixth Amendment rights to a jury trial, requiring reversal of his convictions on those counts. Because defendant did not object to the instructions at trial, we review for plain error under Rule 52(b) of the Federal Rules of Criminal Procedure. 6 The Supreme Court’s recent opinion in Johnson v. United States, — U.S.-, 117 S.Ct. 1544, 137 L.Ed.2d 718 (1997), reaffirmed the following four-part inquiry for plain error:

[Bjefore an appellate court can correct an error not raised at trial, there must be (1) “error,” (2) that is “plain,” and (3) that “seriously affect[s] substantial rights.” If all three conditions are met, an appellate court may then exercise its discretion to notice a forfeited error, but only if (4) the error “ ‘ “seriously affeet[s] the fairness, integrity, or public reputation of judicial proceedings.” ’ ”

Johnson, — U.S. at-, 117 S.Ct. at 1549 (citation omitted) (alterations in the original) (quoting United States v. Olano, 507 U.S. 725, 736, 113 S.Ct. 1770, 1779, 123 L.Ed.2d 508 (1993), quoting United States v. Young, 470 U.S. 1, 15, 105 S.Ct. 1038, 1046, 84 L.Ed.2d 1 (1985), in turn quoting United States v. Atkinson, 297 U.S. 157, 160, 56 S.Ct. 391, 392, 80 L.Ed. 555 (1936)).

Defendant finds plain error in the following jury instructions:

In order to sustain its burden of proof for the crime of willfully filing a false tax return as charged in Counts 107 and 108 of the indictment, the government must prove the following four essential elements beyond a reasonable doubt.

One. The defendant, Michael I. Monus, made and signed a tax return for the years 1990 or 1991 that contained false information as to material matter as detailed in the indictment.

Two. The defendant knew that this information was false.

*387 Three. The return contained a written declaration that it was being signed subject to the penalties of perjury.

And Four. In filing the false tax return the defendant, Michael I. Monus, acted willfully.

At trial, defendant did not request specific, instructions for the tax counts, and the record does not reflect that defendant ever informed the District Court that he thought more detailed jury instructions were required. Nevertheless,' defendant now argues that the District Court erred in not giving the jury a more detailed instruction. Defendant claims that the jury should have been told that it must first decide whether the payments to the WBL and those directly to defendant constituted embezzled funds, properly considered taxable income, or whether they were loans and advances made with a consensual recognition among the parties that they must be repaid, which would not be taxable. He also argues that the court erred in not instructing the jury on the definition of “embezzle” and what constitutes a “material matter.” Defendant concedes that the jury instructions correctly described the material elements of the offense; he argues, however, that “factual issues necessary to any finding of guilt were not presented to the jury.”

The District Court correctly instructed the jury that they must find that defendant knowingly and wilfully filed a false income tax statement. The overwhelming evidence at trial showed that defendant had no intention of repaying the money that he embezzled from Phar-Mor. It showed how defendant refused to repay some “advances,” how he and others concealed these payments in false and fraudulent accounts, and how they removed these payments from the books through fraudulent accounting. Under these circumstances, we need not consider whether failing to give the jury a more detailed instruction on Counts 107 and 108 satisfied the first three prongs of the plain error inquiry. Even if it were error, it did not substantially affect the integrity, fairness, or public reputation of the judicial proceedings. .Therefore, the jury instructions for these counts do not warrant reversal of defendant’s convictions. Johnson, — U.S. at-, 117 S.Ct. at 1549.

C. Obstruction of a Grand Jury Proceeding

(Count 109)

Defendant was indicted and convicted of one count charging the defendant under 18 U.S.C. § 1503, which provides, in pertinent part, that “[wjhoever ... corruptly ... influences, obstructs, or impedes, or endeavors to influence, obstruct, or impede, the due administration of justice” shall be guilty of an offense against the United States. 18 U'.S.C. § 1503. Before trial defendant moved to dismiss this count because, inter' alia, the indictment failed to allege that defendant had knowledge of a pending judicial proceeding. The District Court denied defendant’s motion. At the end of the prosecution’s case, defendant moved for a judgment of acquittal pursuant to Fed.K.Crim.P. 29. The court denied this motion as well. The jury convicted defendant on this count based on evidence that he and other, unnamed persons shredded WBL documents in an attempt to obstruct pending grand jury proceedings. After he was convicted, defendant renewed his motion for a judgment of acquittal on Count 109 and moved for- a new trial on all counts pursuant, to Rule 33. The District Court denied both of these motions.

In order to sustain its burden of proof for a conviction for the crime of corruptly endeavoring to influence, obstruct or impede the due administration of justice, the government must prove three essential elements: (1) that there was a pending judicial proceeding, (2) that the defendant knew this proceeding was pending, and (3) that the defendant then corruptly endeavored to influence, obstruct, or impede the due administration of justice. See United States v. Bashaw, 982 F.2d 168, 170 (6th Cir.1992); United States v. Williams, 874 F.2d 968, 979 (5th Cir.1989).

Defendant argues that his conviction on Count 109 must be reversed for three reasons: (1) that the indictment failed to allege explicitly that defendant had knowledge of pending grand jury proceedings, (2) that the evidence at trial was insufficient to support a conviction, and (3) that the District Court erred in not including a supplementation to *388 its jury instruction that defendant had requested. We consider these claims in turn.

1. Sufficiency of the Indictment

Defendant argues that this indictment is insufficient because it failed to allege specifically that defendant had knowledge of the pending grand jury proceedings. We must decide whether the indictment, asserting that defendant “did corruptly endeavor to influence, obstruct, and impede the due administration of justice in a pending federal judicial proceeding, namely a Grand jury proceeding, by shredding and causing to be shredded books, records and other documents of and relating to the World Basketball League,” sufficiently alleged the essential element of knowledge. See Pettibone v. United States, 148 U.S. 197, 206, 13 S.Ct. 542, 37 L.Ed. 419 (1893) (holding under predecessor to § 1503, that indictment “is not sufficient unless it appears the [defendant] knew or had notice that justice was being administered in such a court”). We affirm the District Court’s decision that it did.

Our inquiry into the sufficiency of an indictment focuses on two factors:

In general an indictment is constitutionally adequate “if it, first, contains the. elements of the offense charged and fairly informs a defendant of the charges against which he must defend, and second, enables him to plead an acquittal or conviction in bar of future prosecutions for the same offense.”

United States v. Superior Growers Supply, Inc., 982 F.2d 173, 176 (6th Cir.1992) (quoting Hamling v. United States, 418 U.S. 87, 117, 94 S.Ct. 2887, 2907, 41 L.Ed.2d 590 (1974)). In addition, an indictment is usually sufficient “if it states the offense using the words of the statute itself, as long as the statute fully and unambiguously states all the elements of the offense.” Id. (citing Hamling, 418 U.S. at 117, 94 S.Ct. at 2907). Because the indictment in this case tracks the language of the statute, we must decide whether the statutory phrase “corruptly endeavors” fully -and unambiguously conveys that defendant knew that a .grand jury proceeding was pending...

Defendant, relying on United States v. Aguilar, 515 U.S. 593, 115 S.Ct. 2357, 132 L.Ed.2d 520 (1995), argues that an accusation the defendant “endeavored” to obstruct justice does not sufficiently allege the defendant’s knowledge of a pending judicial proceeding. In Aguilar, the Court reaffirmed its decision in Pettibone that “if the defendant lacks knowledge that his actions are likely to affect the proceedings he lacks the requisite intent to obstruct.” Id. at 599, 115 S.Ct. at 2362. The Court specifically held that evidence that a defendant told false statements to an investigative agent was insufficient to prove his intent to obstruct a grand jury proceeding because it failed to show that defendant knew his actions would be likely to affect that judicial proceeding. In so holding, the Court construed the statutory term “endeavor” as making “conduct punishable where the defendant acts with an intent to obstruct justice, and in a manner that is likely to obstruct justice, but is foiled in some way.” Id. at 601, 115 S.Ct. at 2363. Contrary to defendant’s assertions, the Court did not indicate that an indictment that includes the term “endeavor” fails to assert that the defendant had knowledge of the pending proceedings..

We find, as the District Court and other courts that have considered this issue have found, that the statutory language “corruptly endeavors” alleges fully and unambiguously that defendant knew a grand jury proceeding was pending and intended to obstruct it. See United States v. Haas, 583 F.2d 216, 219-20 (5th Cir.1978) (holding that indictment under § 1503 relying upon statutory language “corruptly endeavored” was not invalid for “failure to allege the requisite intent and knowledge”), ce rt. denied, 440 U.S. 981, 99 S.Ct. 1788, 60 L.Ed.2d 240 (1979); Seawright v. United States, 224 F.2d 482, 482-83 (6th Cir.1955) (finding that indictment under § 1503 containing phrase “did ... wilfully endeavor”, was not insufficient for failing to contain express allegation of knowledge); United States v. Jackson, 850 F.Supp. 1481, 1499-1500 (D.Kan.1994) (holding that indictment alleging defendants corruptly endeavored to obstruct grand jury investigation sufficiently alleged knowledge and intent); United States v. Schwimmer, 649 F.Supp. 544, 548 (E.D.N.Y.1986) (finding that phrase *389 “corruptly endeavors” “encompasses knowledge of a judicial proceeding and intent to impede it”).

2. Sufficiency of the Evidence

Defendant argues that the District Court erred in denying his motion for a judgment of acquittal on Count 109 because the evidence at trial was insufficient to establish either that a grand jury proceeding was pending at the time the documents. were destroyed, or that defendant knew the grand jury proceeding was pending. .This argument fails.

The indictment charged defendant with shredding WBL documents on December 18, 1992. Defendant contends that no grand jury proceeding was pending at that time, because Lyons, the agent of the grand jury, did not present the evidence that he had collected to the grand jury until January 29, 1993. Until that time, defendant asserts, the investigation was an IRS and FBI investigation, not a grand jury proceeding, Our inquiry into whether a grand jury proceeding is pending focuses on “ “whether the subpoena is issued in furtherance of an actual grand jury investigation, i.e., to secure a presently contemplated presentation of evidence before the grand jury.’ ” United States v. Tackett, 113 F.3d 603, 612 n. 6 (6th Cir.1997) (quoting United States v. Simmons, 591 F.2d 206, 208-09 (3d Cir.1979)).

The witnesses at trial included Terry A. Lyons, a special agent with the FBI, who testified that he and an IRS agent investigated Phar-Mor, defendant, and the WBL. Lyons testified that the first grand jury subpoenas were issued August 19, 1992 to banks and accounting firms. These subpoenas had a return date of September 15, 1992. Lyons also testified that he contacted defendant’s attorney regarding the investigation on November 2, 1992. Lyons testified that he also served a subpoena seeking WBL documents on Dr. John Geletka, the commissioner of the WBL, on December 4, 1992 and interviewed him regarding that subpoena on December 16, 1992. Lyons also testified that he was acting as an agent of, and records custodian for, the grand jury investigating Phar-Mor. He then testified before the grand jury, summarizing the documents that he had collected, on January 29, 1993. We find that this evidence was sufficient to establish that a grand jury proceeding was pending on December 18.

After considering the evidence presented at trial and drawing all inferences. in the favor of the government, we also find that the evidence was sufficient to allow a rational juror to -infer that defendant had acquired knowledge of the grand jury proceeding from Dr. Geletka. The evidence at trial included Dr. Geletka’s testimony that he was a friend of defendant, had served with defendant on a state university board of trustees, and worked with him as commissioner of the WBL. Dr. Geletka testified that in September or October of 1992 he talked to defendant about removing boxes of WBL .documents from his office building, and that sometime that fall movers from a local moving company removed everything from his office. FBI agent Lyons testified that when he interviewed Dr. Geletka on December 16, 1992 regarding the subpoenaed documents, Geletka was unable to provide them because they had been removed from the office to the warehouse of the Carney-McNichols Moving Company. Trial evidence included the testimony of Gregory Carney and Larry Hamilton, both of whom worked for Carney-MeNichols. They testified that on December 18, 1992, two days after Lyons interviewed Geletka, they watched defendant and two unidentified individuals shred WBL documents. In sum, we agree with the District Court that there was sufficient evidence to support defendant’s conviction under § 1503.

3. Error in Jury Instructions

Defendant argues that reversal 'of his conviction on Count 109 is also required because the District Court erred in refusing to give requested jury instructions. The District Court’s refusal is only reversible error if the following three conditions are met: “(1) the [requested] instructions are correct statements of the law; (2) the instructions are not substantial