James J. Frank v. United States

III. reasons, foregoing judgment

For the denying Kerr-McGee’s

of the district is affirmed. injunctive relief

motion for Petitioner-Appellant, FRANK,

James J. America,

UNITED STATES

Respondent-Appellee.

No. 89-1920. Appeals,

United States Court

Seventh Circuit.

Argued Jan. Sept.

Decided Mernitz, Christopher Kirages,

David W. Stark, Smith, Doninger, Mernitz & India- Ind., napolis, and Andrew C. Mallor and Christiansen, Mallor, & David J. Grodner Ind., Bohrer, Bloomington, petitioner- Frank, appellant Blooming- James J. ton, Ind., pro petitioner-appellant se. 829 statute, Hoehner, fraud 18 U.S.C. while mail F. John Wiegart and JoAnna 1341, property rights, Atty., clearly protects Atty., of the U.S. Office Asst. U.S. § Ind., Hammond, respondent-appellee. citizenry of the for defraud the schemes to government do not intangible right good Jr., WOOD, CUDAHY Before 356, scope. Id. at the statute’s fall within COFFEY, Judges. Circuit petition filed his at 2879. Frank 107 S.Ct. 2255, seeking to vacate 28 under U.S.C. § WOOD, Jr., Circuit HARLINGTON peti- In his and sentence.1 his conviction Judge. 2 tion, failed contended Count Frank appeals Frank from Petitioner James J. fraud under an offense for mail to state petition. 2255 his section dismissal of argued that the obstruc- McNally. He also below, we af- discussed For the reasons 23 was justice charge in Count tion of firm. 1503 and brought under section improperly guilty plea to the obstruction that his PROCEDURAL I. FACTUAL AND voluntarily made. charge was not justice BACKGROUND 3, 1989, the court denied March district On charged in 29, 1985, Frank was On June and Frank petition, 2255 Frank’s section indictment, twenty-three count appeals. involve- stemming from charges re- favorable obtain in a scheme ment for pending cases clients in for his

sults II. ANALYSIS (“DUI”) the influence driving under argument his appeal, convictions Frank renews his clients’ DUI On prevent records of an appearing (1) to state indictment failed (“BMV”). of Motor Vehicles McNally Bureau for mail fraud under offense plea to the obstruction that his of mail to one count pled guilty Frank involuntary. We con- charge justice was (Count 2), 2,1341 fraud, under 18 U.S.C. §§ in turn.2 arguments of these un- sider each justice and one count obstruction 23), (Count in return 1503 der 18 U.S.C. § agreement dismiss government’s A. Mail Fraud Conviction The sen- district court the other counts. The charges 2 imprisonment indictment years Frank to Count three tenced fraud mail suspended the sentence mail fraud. 2 and Frank with

on Count on five- ele 23, placing 1341, two statute, instead contains Count 18 U.S.C. § consecutively with “scheme,” to run years probation existence of a ments: His imposed for Count the sentence the mails furtherance the use of paying a on his probation conditioned is entitled he argues that scheme.3 Frank $5,000 first six months within the fine of 2255 because relief under section supervision. the scheme charge that indictment did not money or entity of deprived any person or sentenced, Su After Frank was Frank, the is, according to property; McNally v. United preme Court decided mail charged him 2875, 350, 97 107 S.Ct. “intangible longer under the no viable (1987). held that McNally 292 L.Ed.2d argument his raise 1. Frank, serving suspended Frank does not currently Because his iswho charge was im- justice the obstruction of 23, that properly brought probation under the under Count sentence 1503, we do not section purposes custody for supervision, in office’s it. consider custody is under One who of section 2255. custody parole because board is among oth- proscribes, 3. The fraud statute significantly lib parole restrain one’s effects erty. Mabry intending de- things, or er conduct “devised Johnson, n. 467 507 defraud, v. or for vise scheme or artifice (1984); L.Ed.2d 437 81 n. by means of false obtaining money or Swan, Cir. Vargas F.2d representations, pretenses, fraudulent or promises.” 1988). § 1341. 18 U.S.C. just because theory prosecution.4 Section not defective rights” intangible prisoner “claiming deprivation it also provides relief to a Folak, United States upon ground rights. to be released (7th Cir.1988). Thus, “where a imposed in violation the sentence single of facts establishes both a or the Laws of the set of the Constitution money or Custody resulting from an to defraud a victim of scheme United States.” property, deprivation as well as a of some fails to state an offense indictment that right,” require intangible States. does violates the laws of the United Keane, Id. at 113. 199, United v. States 204 aside the 852 F.2d us to set conviction. — denied, U.S. -, (7th Cir.1988), cert. generally, reviewing More see 2109, (1989); 670 109 104 L.Ed.2d S.Ct. challenged consider the count as a “should Gimbel, v. also States United 830 F.2d reading in whole and refrain from it Cir.1987). 621, (7th 624 v. United States hypertechnical manner.” Mosley, 786 F.2d 1330, 1334 (7th Cir.) (quot sufficiency review the We Gironda, United States v. ing 758 F.2d a de novo standard. denied, cert. Bucey, v. 1297, 1201, (7th Cir.), United States 1210 474 U.S. 876 F.2d — denied, 523, (1985)), cert. (7th Cir.), 1004, 106 S.Ct. 88 L.Ed.2d 456 1301-02 denied, cert. 565, (1989). 1184, 2919, -, 106 S.Ct. 110 107 L.Ed.2d 560 476 U.S. (1986). Finally, we determining whether an indictment observe When McNally, sufficiency charges petitioner challenging a court that a an offense under legal heavy has a un beyond must look how the scheme is of the indictment burden: ly in indictment and “ex less an indictment “is so defective on its characterized charge ‘specific alleged amine conduct face as to not an offense under whether construction,” clearly proscribed by ques it cannot be in the indictment is reasonable ” Ginsburg v. United States fraud statute.’ tioned under section 2255. Doe, States, (7th (cita 982, (7th 986, Cir.1989) 988 909 F.2d 984 Cir. 867 F.2d see also Bateman v. United v. United omitted); 1990) (quoting tion Burchfield States, (7th Cir.1989); States, 1304, Cir.1976), 544 F.2d 924 875 F.2d denied, Bonansinga, United States cert. 855 F.2d 430 U.S. 97 S.Ct. (7th Cir.1988). (1977)). principles An indictment L.Ed.2d 806 With these mind, alleging deprivation property rights is in we consider the indictment itself.5 "intangible judicial rights” type County, 4. The term refers to the bailiffs of the Lake Indiana right right McNally, e.g., government, referred to in devised and intended to branch of devise, good government loyal in, and and honest participated and a scheme to defraud: recognize employee. services from an We citizens, (a) County public Lake and its its property rights may intangible. course that officials, public employees and its of their 19, 25, Carpenter See v. United right County Lake to have the business of the 316, 320, 108 S.Ct. L.Ed.2d 275 fairly, system honestly, im- Court conducted (McNally scope does not restrict the of section collusion, par- partially, corruption, free from tangible, opposed intangible, prop- 1341 to as interest, tiality, bribery dishonesty, conflict Bates, erty rights); United States v. fraud, the laws of the and in accordance with (7th Cir.1988) only (McNally distinguishes Indiana; State of rights intangible right between and the (b) right County citizens of their Lake and its impartial government, to honest and of citizens prosecuted and decided to have DUI cases tangible intangible property not between and corruption, free sion, collu- from the influence rights). dishonesty, partiality, conflict of inter- est, bribery fraud in accordance with the and through Paragraphs 12 of Count 1 of the Indiana; laws of the State indictment describe Frank's scheme as follows: (c) County system Court and the Lake 6.Beginning early at least as as in or about County right of their of Lake citizens January, continuing approxi- and until loyal, and honest services of court faithful November, 1984, mately precise in or about bailiffs, judges, temporary judges and other being Jury, dates unknown to the Grand ... employees perform- FRANK, herein, public and officials together JAMES J. defendant public employ- of acts related to their ance ment; with co-schemers known and unknown to the Jury, Grand which said known and unknown Indiana, included, (d) County, necessarily co-schemers but were not The citizens of Lake to, Indiana, judges, temporary judges, and limited and court citizens of the State of their further The indictment cases. DUI the indict- 1 of 6 of Count Paragraph fees in received others involvement Frank that describes Frank’s ment6 fees, citi- County, larger than usual Lake received defraud employees officials, public zens, public DUI clients’ keeping Frank’s return for state County and the of Lake BMV’s appearing in the convictions good their records. is employees. services honest uphold should arguing allegations readily apparent fraud, for mail conviction now defunct based are claims Be- fraud. theory of mail intangible rights it al- McNally because rights lan- intangible sustainable existence cause government deprive the to the indict- necessarily leges fatal a scheme to guage is not oth- Specifically, whether ment, determine tangible property. must we of describing of paragraphs Frank solicited er that contends government an offense allege to defraud the scheme to system court the state within individuals McNally. For cognizable that to his pertaining records files and steal that below, conclude discussed reasons on focuses clients. The DUI do. they the indictment: 1 of 9 of Count through paragraphs in allegations to of the scheme part further It was pursuant a scheme 1 describe Count of FRANK would that JAMES J. defraud favor- sought to obtain (1) Frank to which certain attempt cause to and cause DUI pending in his clients for results able court bailiffs judges, temporary judges, other and officials causing court by cases employees and public officials and other dis- to act employees and public officials other- remove, destroy, and secrete, to cases and these handling in honestly regard to the dishonestly in wise act DUI convic- clients' prevent his sought to prose- court and official disappearance of record the BMV’s appearing from tions files charges the DUI records of cution or de- take to causing these officials by clients DUI FRANK’S J. against JAMES clients’ to his pertaining stroy the records prosecution and court pearance of official employees of public and their public officials against charges JAMES filed the DUI records of properly DUI convictions to have their laws of the clients in violation DUI J. FRANK'S to, by, the BMV. reported and recorded State of Indiana. of the that to defraud scheme part of the It was 7. to part the scheme of a further 10. obtain to seek would and did J. FRANK JAMES and cause would J. FRANK that JAMES defraud DUI clients in his DUI results for favorable temporary judges, certain attempt cause to Lake Coun- divisions of pending in all cases public officials and other judges, bailiffs judges, causing tem- by system certain ty Court dishonestly in viola- and to act employees and bailiffs, public other officials judges, and porary in their of Indiana the State laws of tion of the dishonestly, a con- with employees to act and J. FRANK’S JAMES of handling cases interest, by bribery and and influenced flict DUI clients. contrary the State to laws of fraud part the scheme a further 11. It was Indiana. benefit would FRANK J. JAMES defraud that to de- scheme of the part further It was a 8. receiving by activities aforementioned from the and cause J. FRANK would that JAMES fraud others, himself, his DUI and fees for judges, temporary certain attempt to cause prom- J. FRANK’S JAMES for in return clients public officials and other bailiffs judges, court their convictions DUI clients ise his notify the properly employees to fail the records appear in would not DUI J. of JAMES convictions DUI of the BMV BMV. County Court Lake DUI clients FRANK’S part of the scheme It was further required otherwise system same would as the did would J. FRANK JAMES defraud of the State statutes by and civil criminal that he clients of his DUI agree certain Indiana. ability his larger fee because paid a would be to de- part further It was a BMV offi- off of keep convictions their DUI cause FRANK would J. fraud JAMES cial records. temporary judges, certain attempt cause charges Frank with which public officials 6. Count and other bailiffs judges, court describes fraud, which remove, incorporates Count secrete, destroy, and employees to disap- scheme. regard dishonestly in act otherwise transcript of the laws of the State of Our review of the violation of the plea hearing reveals that the Indiana. trial, anticipated proceeded if Count defense counsel con- argument, At oral following: the evidence would show the record nothing in shows tended that Guy When Fulkerson was arrested for DUI prosecutorial records court or legal he retained Frank’s services. destroyed and were ever removed of one Frank offered Fulkerson the choice deprived at most was then BMV arrangements. of two fee For lower driving to drunk pertaining information ($1,500), represent fee Frank would Fulker- not transferred to the that was convictions promises but offer no as to the son would Because, according courts. BMV from the ($2,400), outcome; higher case’s for the fee counsel, this information is not to defense represent Frank would Fulkerson with a by the mail type protected promise that Fulkerson’s arrest or convic Carpenter progeny, and its statute part driving tion would not be made his that the insists defense counsel record maintained with the BMV and that under McNally. state an offense fails to keep despite Fulkerson would his addressing argument, we observe having previous two DUI convictions with is no in years. that the claim that there the last four Fulkerson chose the at the outset arrangement. subsequently ever re latter He sur any records were evidence rendered license to one of the destroyed goes not to the issue of his driver's moved or personnel County court with the Lake depriva a whether Court, DUI, pled guilty to the received a property rights but tion of license, one-year 180-day restricted and a there was a rather to the issue of whether County suspended sentence in the Lake guilty Frank’s sufficient factual basis for Jail, placed probation year, was on for one charge. Under Fed. plea to the mail fraud undergo alcohol and was ordered to abuse 11(f), accepting before R.Crim.P. conviction, DUI treatment. Fulkerson’s plea, determine that a the trial court must however, was never entered record with plea. support factual exists to the basis BMV, days the and three after his court is, part, in purpose The of the rule appearance, Fulkerson received from complete appeal ensure that a record for Frank the license he had surrendered to exactly exists that clear what “mak[es it] subsequent the court. Frank indicated in a to, the admits and whether the defendant that he had “fixed” Fulkerson’s interview factually to con admissions are sufficient conviction the assistance of the DUI with alleged stitute the crime.” United States Cir.1985),court bailiff. Fountain, 777 355 v. F.2d denied, 106 rt. S.Ct. reviewing transcript plea the of the After ce 1232, (1986). can The court hearing, find that the events detailed ap anything make this determination from support allegation the 9 above record, including pearing the the 1 indictment that Frank of Count government’s presentation of evidence. secret, remove, caused court officials Montoya, v. 891 F.2d United States destroy court records Frank’s DUI (7th Cir.1989). lack Because of com clients. An examination of Indiana law pliance requirements the of Rule 11 that the court record a drunk-driv- shows may grounds granting section license, 2255 ing as well as case consists of relief, Nevarez-Diaz v. United other documents. Under Ind. Code (7th Cir.1989), we address 9-4-l-54(b)(2),7 person convicted § government’s allega subject claim that the driving is to hav- while intoxicated ing If any suspended. tion that records were removed is un his the sentence license supported by imposed a driver’s license sus- the record. recommends 9-4-1-54, 9-4-l-54(b)(3) 9-4-l-54(b)(2) at the time of Fulk- sections and have 7. Section in force conviction, subsequently repealed rewritten, erson’s was been their substance remains essen- 9-11-1-5, replaced by and sections 9-11-2-2 to tially identical. Although 9-11-2-5 and 9-11-3-1 to 9-11-3-4. heavily on States relies to forward judge pension, (7th Cir.1987), Gimbel, 830 F.2d 621 along with license the surrendered BMV Murphy, 836 F.2d conviction, United States BMV abstract denied, (6th Cir.), cert. driving privilege suspend must (1988),in claim 102 L.Ed.2d person convicted. Ind.Code sufficiently indictment did not ing license, abstract, 9-4-l-54(b)(3). The § deprive allege scheme relat- supporting documents other however, cases, are dis property. Both sentence conviction and ing to the Gimbel, the defendant tinguishable. records. court constitute engaging fraud for was convicted mail case, Frank returned present In the Treasury De deprive the in a scheme to days of three client within to his currency transac reports of partment of the DUI conviction appearance, and truthful accurate tions and of other BMV’s records. entered never ar and data. information the BMV did dispute that beyond is thus deprived the Trea the defendant gued that license.8 Fulkerson’s receive not tax revenues because sury Department of information, which if his concealed de- Frank contends Treasury disclosed, might enabled have of a sort not only information prived We tax deficiencies. Department assess statute when mail fraud by the protected argument and reversed rejected this li- receive Fulkerson’s not BMV did on the conviction defendant’s by this persuaded argu- are not We cense. him accused ground asser- ment, single of a bald consists which providing information only “of by defense counsel effect made to this tion could ‘whose actions government officials argument. oral at ” by the disclosure.’ affected have been has a Rather, the BMV conclude that we at (quoting McNally, 483 at Id. license in the surrendered property interest 9). 9, 2882 n. 107 S.Ct. 361 n. at McNally. cognizable is under itself however, case, paragraph present In the of the Indiana provisions above-cited The alleges a indictment of the 9 of Count is to receive that the BMV provide Code court government of defraud the scheme to who have of those individuals licenses the law, surren- the Under Indiana records. driving. drunk suspended for licenses their part is the itself dered license law, then, BMV enti- Under of the tangible property and is record licenses. While possession of these to tled Thus, here BMV. question, we believe admittedly a close BMV of deprive scheme to more than a a the BMV McNally, has purposes of information. right in the surrendered tangible property did not involve By Similarly, Murphy ar- provisions. on these licenses based of a government deprive the re- to license ranging to Fulkerson’s have The indictment tangible property right. to transferred rather than to him turned one “to scheme as described the Murphy the BMV of BMV, deprived thus Frank right of Tennessee the State defraud property.9 government made single statement that to a hearing, government plea stated theAt 8. and minimum explaining the maximum inappropriate when because other was that restitution receive. intangible Frank could sentences being deprived its public than good government, was no discer- right there be said to cannot that Fulkerson argues We Frank observe Frank's crimes. nible victim of li- property in his surrendered government have interest shows that that this statement property in- has a an claiming cense. While individual that he strayed the record in license, see Bell v. her in his or driver’s terest Burson, belonging the BMV. After consid- stole files 1586, 1589, 91 S.Ct. language ering both actual (1971), a driver's who one loses 29 L.Ed.2d the factual basis indictment and Count 1 loses of valid conviction presented as a result government license plea that the for Frank's Doe v. as well. See however, property unwilling interest hearing, attendant plea we are at the Cir.1983). Edgar, weight give us have would to ascribe the registration McNally, accepted to chari- of he would not have to issue certificates bingo organizations package containing to conduct deal 2 and table Counts games, complete, true and accu- by government. based on 23 offered to him the provided by rate to be those information concluded, however, already have We applying permits.” at for said 836 F.2d 2 of the indictment states an Count 251. The contended that the cognizable McNally. offense that is bingo property right was a and that license argument guilty plea that his right object deprived it of its to the was justice charge in the obstruction of Count of these licenses when the defen- issuance 23 must therefore fail. provided information to the sec- dant false Additionally, we observe that Count a li- retary of state’s office and received separate statutory 23 are and Count viola- lodge. masonic cense for an inactive wrong- tions: Count based on Frank’s Sixth reversed the defendant’s mail Circuit attempt grand jury, ful to interfere with a conviction, holding Tennessee’s 1503; an states offense under section pertaining to to accurate information Count based on the above-described bingo permits an its issuance of constituted scheme, states an offense under section intangible right. Murphy It is true the 1341. Thus even if Frank es- could have bingo court stated that while prejudice tablished cause and for his fail- issued, once may property of the holder prior ure to raise the issue of voluntariness at property it is not of the state. Id. 253- filing petition,12 his section 2255 however, govern- Murphy, unimpressed argument would be with his property the license was ment’s claim that plea justice that his obstruction supported by any allegation was not either charge involuntary was because Count 23 by any provision part package of a deal. Frank had the state law. pleading choice of to two counts of a therefore conclude that the indict- We twenty-three going count indictment or present ment in the sets out a scheme case trial. That this was the he choice deprive given plea does not make his to Count 23 rights in violation of section involuntary. charging cognizable an offense reasons, foregoing For the the district McNally.10 petition court’s dismissal of Frank’s for section 2255 relief is B. Obstruction Justice AFFIRMED. charged in Frank was Count 23 of the justice indictment with obstruction of un- CUDAHY, Judge, dissenting: Circuit wrong- der 18 based on his U.S.C. § McNally invalidated mail fraud convic- attempt grand jury ful interfere with pub- investigation.11 Frank tions based on schemes to defraud the contends that his plea knowingly intangible right good govern- and lic of its Count 23 was voluntarily loyal made had he ment and to honest and because known services allege light government employees that Count 2 did not a crime in and officials. clients, Madison, argues give 10. also that the indict- one of his DUI false ment is sustainable under on the misleading Special information to the ground government alleges deprive that it a scheme to Jury regarding Grand Madson's involvement intangible property in the form handling driving with Frank's of his drunk case. (1) type protected by information of the statute, mail fraud to control plead 12. Defendants who and then attack driving privileges. Because we conclude that by raising their sentences new constitutional deprive the indictment government a scheme to peti issues for the first time in a section 2255 tangible property in the form of prejudice failing tion must show cause and licenses, surrendered we do not address the appeal to raise these issues on direct from their merits of these claims. convictions. Bontkowski United Specifically, charged Frank was with obstruc- Cir.1988). 11. justice attempt tion of for his to convince Carl Congress possession The Court held that had intended into of the license document penalize only schemes fraudulent de purely incidental to the information signed deprivation money, effect Moreover, blockage. neither the indict- “intangible rights.”1 and not of proof ment nor the shows effort or Perhaps prosecutors because the of this any alleged intent to take “property” or to among successfully first circuit were deprive money an owner of or property. employ “intangible rights” theory case, this majority attempts a “reach” (see, public corruption mail fraud in cases justice which even claims of substantial Isaacs, 493 F.2d 1124 e.g., United States v. possibly justify. cannot (7th Cir.), denied, cert. I respectfully therefore dissent. (1974)), this understandably strong circuit has had an

reluctance to invalidate mail fraud convic intangible rights depriva

tions based on part,

tions. For the most these efforts to

salvage involving mail fraud convictions

public corruption are commendable since technicality

they sophistication treat justice. in the interest of substantial America, UNITED STATES Nonetheless, in all of our cases which dis Plaintiff-Appellee, tinguish away McNally, there has been reality legitimacy to our efforts to fit charged. the doctrine to the facts With all PHILLIPS, Defendant-Appellant. James however, respect, I do not believe that ob servation can made of the efforts to be No. 89-2797. save the case before us from invalidation. Appeals, States Court charged essentially Here Seventh Circuit. of Indiana was de

prived necessary of information to the ad Argued April justice. allegation ministration of This Sept. Decided pure simple intangible rights genre. simply A driver’s license is evi person’s right

dence of a named to drive a vehicle; itself,

motor it is not in case, thing of value or context “property” despite the fact that such a — might “proper technically

ty” activity of the BMV. The defendant’s simply interrupted permanently

here governmental of informa

blocked flow

tion. This is what the lost—in did

formation—and the driver’s license

incorporate symbolize what was lost. merely facilitating a device for Carpenter

flow of information. Cf. (1987) (holding that infor independent

mation had economic which “property” purposes

value of mail fraud.) coming

and wire The defendant’s intangible rights theory. Congress promptly proval overruled as to prosecutions ap- future and thus indicated its

Case Details

Case Name: James J. Frank v. United States

Court Name: Court of Appeals for the Seventh Circuit

Date Published: Sep 24, 1990

Citation: 914 F.2d 828

Docket Number: 89-1920

Court Abbreviation: 7th Cir.