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United States of America v. Kevin W. Williams

September 7, 2012


Appeal from the United States District Court for the Western District of Washington Robert J. Bryan, Senior District Judge, Presiding DC No. CR 09-5465

The opinion of the court was delivered by: Tashima, Circuit Judge:


Argued and Submitted April 12, 2012-Seattle, Washington

Before: Procter Hug, Jr., A. Wallace Tashima, and Consuelo M. Callahan, Circuit Judges.

Opinion by Judge Tashima


Defendant-Appellant Kevin Williams appeals his jury conviction and sentence for three counts of wire fraud, two counts of possession of an unregistered firearm, and one count each of extortion, making a false statement, destruction of a letter box, and possession of a firearm not identified by a serial number. Williams contends that the district court erred in grouping his offenses for purposes of sentencing and in applying five sentencing enhancements. We affirm the district court's imposition of two of the sentencing enhancements at issue, but otherwise vacate Williams' sentence and remand for resentencing.*fn1


In 2006, the FBI began investigating an Atlanta-based Ponzi scheme known as the International Management Associates ("IMA") fraud. The approximately 300 victims of the scheme lost a total of $86 million. Kirk Wright was the principal defendant in the federal prosecution that followed. Bill Perkins was appointed by the Securities and Exchange Commission as receiver for IMA's assets and an investors' committee, made up of the seven largest IMA investors, was formed to represent the fraud victims. Mark Kaufman was appointed as counsel for the investors' committee.

In July 2007, Williams began calling Kaufman, Perkins, and FBI Special Agent William Cromer, who was investigating the case. Williams told them that he was a private investigator, and that he had been doing his own investigation into the IMA fraud, and he asked for payment for his information. At no point did Williams provide any evidence that he possessed any relevant information. During this time, Williams lived in Chehalis, Washington. State records show that Williams never reported income as an investigator and no payments were made to him by others for such services. His bank accounts also did not reflect any expenses for investigative work. In August 2007, he changed the name of his bank account to the "E.F.E. Foundation." His telephone answering machine also included a message explaining that the E.F.E. Foundation specialized in fundraising and investigative work.

Williams' housemate, Dean Hanson, testified that in October 2007, Williams decided to blow up his own mailbox in order to bolster his efforts to get a share of the IMA money. Williams built a pipe bomb and set it off on October 21. At Williams' direction, Hanson cleaned up and disposed of the bomb's parts and called the sheriff to report the bombing. Melissa Nacht, Hanson's girlfriend, testified that Williams staged the explosion so that "Agent Cromer would think that other people believed Mr. Williams about having this infor- mation and would take him more seriously." During the ensuing investigation of the bombing, Williams provided a recorded statement to Postal Inspectors in which he said that the explosion occurred when he reached his hand into the mailbox to collect mail and that the bombing probably occurred because of his private investigation work on an Atlanta fraud case.

Postal Inspector Rod Stephens later explained that the Postal Service was "extremely nervous" about the mailbox bombing; local postmasters were worried about sending their letter carriers out to deliver mail because they feared harm, which could damage the integrity of the mail system. On October 24, 2007, Postal Inspectors and ATF Agents visited Williams' residence to investigate the bombing, accompanied by a dog trained to detect explosives. When the investigators arrived at his house, Williams greeted them with an assault rifle in his hands. Alarmed, Postal Inspector Stephens asked him if he had any other weapons. Williams responded by listing his firearms, including one he described as a "zip gun." Williams' use of that term caught Stephens' attention, because a zip gun is a homemade pen or flashlight gun that is concealable and well-known to be illegal. The investigators received Williams' consent to enter his house and retrieved a fully-assembled zip gun with ammunition attached to its container.

In October 2007, Kaufman received another phone call from Williams, in which Williams told him that people were "hounding" him and listening in on his communications. Kaufman thought that Williams was trying to convey that his information was of value. On January 22, 2008, Williams sent an email to Steve Atwater, a member of the investors' committee, asking for $172,000 in exchange for Williams' information. Atwater forwarded the message to the rest of the committee.

On January 24, 2008, Williams sent an email to Kaufman and the members of the investors' committee, as well as a number of other individuals working on the IMA case. In the email, which included many typographical errors, Williams introduced himself as the owner of an investigative company and wrote that he had investigated the IMA case for two years and across six states. He implied that he had information indicating that individuals other than Kirk Wright were involved in hiding the IMA money and mentioned that his mailbox had been blown up by someone who was scared of his information.

Ryan O'Neal, a member of the investors' committee, emailed Williams in January to express his interest in Williams' information. Williams replied, explaining that he had spent 2400 hours of his time and over $69,000 investigating the IMA case. The two began communicating by phone; Williams asked O'Neal for $250,000 in payment and O'Neal offered to meet Williams at the Portland airport to discuss Williams' information. When they met at the airport, Williams described to O'Neal a conspiracy theory that people close to the IMA case were hiding the missing money. Williams showed O'Neal an accounts payable ledger, which O'Neal's lawyer subsequently determined was not indicative of any conspiracy.

On February 9, 2008, Williams sent O'Neal another email. The email, which included a number of typographical errors and expletives, expressed frustration that he had not yet been paid for his investigation and again mentioned the mailbox bomb as evidence that "obviously I have what somebody else wants." He asked O'Neal to wire $250,000 to an account in order for the E.F.E. Foundation to begin releasing its information. He closed the email by stating that as of February 12, his investigation would stop and his "distributing" would begin. Williams followed up with another email on February 10, full of misspellings and foul language, railing against O'Neal as untrustworthy and closing by saying, "Here at the E.F.E., the right people love us, the right people respect us, and the right people fear us." Williams wrote again on February 11, stating that if O'Neal had trusted E.F.E. from the beginning, "we would both already have our money."

On February 18, 2008, Williams emailed the investors' committee. He claimed that the government and other individuals involved with the investigation, including attorneys and members of the committee, already had Williams' information about the IMA fraud and were covering it up. He wrote that he had been shot, that his mailbox had been blown up, and that he was getting calls from a computer-generated voice at night. He complained that all he had ever asked for were his expenses back. He closed the email with expletive-filled invective, stating, "I wont [sic] wait for karma to come to you, I'll be bringing it to you my-self immediately. So you all better start paying attention to everything around you because hell is soon to be in full session." A number of the recipients of this email took it to be a threat of physical harm.

In late April 2008, Williams drove to Atlanta to attend Kirk Wright's trial. Williams was arrested at the federal courthouse and a search of his van revealed guns, ammunition, blasting caps, other explosives, a copy of the Anarchist Cookbook on a floppy disk, and a walking cane altered to be used as a firearm. Williams pled guilty to firearms ...

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