609 F.2d 531 | D.C. Cir. | 1979
Lead Opinion
Appellant was convicted by a jury on all counts of a thirty-five count indictment charging violations of both federal and District of Columbia statutes. The offenses stemmed from a scheme in which appellant would be paid to have an accomplice delete adverse information from, and add fictitious favorable information to, the computerized credit files of individuals who had difficulty obtaining credit. The altered credit records would then be sent for approval to various lending institutions, ultimately allowing these individuals to purchase automobiles or other items. The indictment, which was based on only eight credit transactions, included one count of conspiracy,
Certain of the multiple convictions under both federal and local law are contrary to congressional intent, requiring vacation of two or four convictions. Furthermore, the mailings at issue here cannot sustain convictions under the mail fraud statute because they occurred after the scheme to defraud had reached fruition. Finally, we vacate the sentences imposed on counts 27 through 29 of the indictment because they exceed the statutory maximum, and we remand for resentencing in accordance with 18 U.S.C. § 1014 and this opinion.
I.
MULTIPLE CONVICTIONS UNDER FEDERAL AND D.C. LAW
Each fraudulent credit transaction gave rise to multiple charges against Alston. In one transaction, an altered credit application and an altered credit report were sent by teletype (counts 13 and 15, wire fraud) to a federally insured savings bank (count 27, federal false statements), the applicant obtained an automobile loan from the bank (count 34, D.C. false pretenses), and the bank notified the dealer about the loan by telephone (count 20, wire fraud). In a second transaction, an individual applied for a home improvement loan from a federally insured bank (count 28, federal false statements), the credit bureau teleeopied an altered credit record to the bank (count 14,
This case raises problems that flow from an overkill of charges against a defendant. Pyramiding charges is particularly troublesome in the District of Columbia, where local and federal offenses can be joined in one indictment pursuant to 11 D.C.Code § 502 (1973).
Appellant argues that the multiple convictions under federal and local law denied him equal protection of the laws. Subsequent to the submission of this case for decision, this court has clarified the method by which we will analyze challenges to convictions under both federal and local law when the acts complained of arise within essentially the same transaction.
A.
The D.C. false pretenses statute, 22 D.C.Code § 1301 (1973), provides that “[wjhoever, by any false pretense, with intent to defraud, obtains from any person any service or anything of value,” shall be subjected to imprisonment for up to three years. The federal false statements statute, 18 U.S.C. § 1014 (1976), provides that “[w]hoever knowingly makes any false statement or report, . . . for the purpose of influencing in any way the action of . any [federally insured] bank” can be imprisoned for not more than two years.
Congress clearly defined separate offenses in each statute: “each provision requires proof of a fact which the other does not.” Blockburger v. United States, 284 U.S. 299, 304, 52 S.Ct. 180,182, 76 L.Ed. 306 (1932); see Brown v. Ohio, 432 U.S. 161, 166, 97 S.Ct. 2221, 53 L.Ed.2d 187 (1977). Conviction on the local charge of false pretenses requires proof of the following elements: (1) a false representation; (2) knowledge of the falsity; (3) intent to defraud; (4) reliance by the defrauded party; and (5) obtaining something of value as a result of the false representation.
On their face, the local and federal statutes address different interests. The local statute focuses on the loss of anything of value, regardless of the identity of the victim. The federal statute is designed to protect specific financial institutions from fraud “in connection with loans or other similar transactions.”
Yet some fraudulent loan applications might result in the grant of a loan, as occurred here,
“[U]nless the intent of Congress is stated ‘clearly and without ambiguity, doubt will be resolved against turning a single transaction into multiple offenses.’ ”
B.
We turn now to the multiple punishments under the federal mail or wire fraud statutes and the D.C. false pretenses statute. The mail
Under the analytical framework established in United States v. Dorsey, supra, we next consider a constitutional inquiry:
[E]ven if Congress intends to punish a defendant twice for violating two statutory provisions, the double jeopardy clause may bar such multiple punishment at a single trial if the two statutory provisions constitute the “same offense” under Blockburger.
591 F.2d at 942.
The statutes in question clearly define separate offenses. Conviction for mail or wire fraud requires proof of only two elements: (1) a scheme to defraud, and (2) use of the mails or wires for the purpose of executing the scheme.
Appellant advances a second constitutional question in his claim that the multiple punishments denied him equal protection of the laws. This claim rests on an assumption that no defendant outside the District of Columbia would be subject to such double punishment because the Department of Justice’s Petite
Although we recognize that the Petite policy is of long standing and strictly enforced,
INTENT TO DEFRAUD
Appellant also argues that the evidence did not establish the intent to defraud required for convictions under the federal mail and wire fraud statutes, and the local false pretenses statute. Conceding that the loan applications and credit records were falsified in order to allow the applicants to obtain credit, appellant nevertheless contends that there was no intent to defraud because the applicants intended to repay the loans and because retention of a security interest in the goods made the loans risk free.
The requisite intent under the federal mail and wire fraud statutes may be inferred from the totality of the circumstances and need not be proven by direct evidence.
We also conclude that intent to defraud under the local false pretenses statute cannot turn solely upon an applicant’s alleged intent to repay the loan. In these transactions, the probabilities of repayment by the borrower over the long term were less than the lender was led to believe. We are not unmindful that installment and other credit sales have created financial problems of substantial proportions for consumers and creditors alike. Many consumers are financially incapable of paying outstanding debts, despite good intentions.
III.
USE OF THE MAILS
Finally, appellant asserts that his convictions on the five counts of mail fraud (counts 22-26) cannot stand. Each count arises from the mailing of an installment sales contract to the lender by the automobile dealer. Appellant argues that, because these mailings occurred after each applicant had taken possession of an automobile, they occurred after the scheme to defraud had reached fruition and were not sufficiently connected to the fraud to fall within the scope of the statute. If appellant is correct, then the convictions are invalid. See United States v. Maze, 414 U.S. 395, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974).
For conviction under the mail fraud statute, the mails must be used “for the purpose of executing” the fraudulent scheme, and not merely “as a result of” such scheme. See id. at 405, 94 S.Ct. 645. In Kann v. United States, 323 U.S. 88, 65 S.Ct.
Appellant here argues that, since the object of the scheme was to obtain an automobile, it reached fruition once the car was driven off the dealer’s lot. The Government, on the other hand, contends that the object was to obtain credit and use of the car over the loan period. Under this theory, the mailing of the conditional sales contract after the loan applicant had obtained credit approval and a car would be within the coverage of the statute.
We believe that the scheme to defraud reached fruition before the mailing of each conditional sales contract. The dealer’s mailing of the contract, which contained the terms of payment and an assignment of the contract to the lending institution, neither furthered the objective of the scheme (i. e., obtaining a loan for the applicant) nor served to conceal the fraudulent representations.
Por the foregoing reasons, we vacate the judgment of the District Court with respect to counts 22 through 29 and counts 33 and 34 of the indictment, and we remand for resentencing in accordance with 18 U.S.C. § 1014 and this opinion. The remainder of the judgment is affirmed.
It is so ordered.
. 18 U.S.C. § 371 (1976).
. 18 U.S.C. § 1341 (1976).
. 18 U.S.C. § 1343 (1976).
. 18 U.S.C. § 1014 (1976).
. 22 D.C.Code § 1301 (1973).
. In imposing sentence, the District Court inadvertently referred to a copy of the indictment other than the renumbered indictment returned by the Grand Jury. All references in this opinion are to the renumbered indictment.
The District Court imposed concurrent sentences of twenty months to five years on counts “1 through 29,” and eight months to two years on counts “30 through 32.” On counts “33 through 35,” the District Court imposed sentences of ten months to three years, concurrent with each other but consecutive to the sentences imposed on counts 1 through 32. Counts 27 through 29 of the renumbered indictment, however, are federal false statements charges carrying a maximum sentence of two years; thus, the imposed sentences of five years on these counts must be vacated.
. Appellant also argues that the trial court erred both in declining to poll the jury concerning a television news segment broadcast during the trial, and in allowing the prosecutor to cross-examine appellant concerning plea bargaining after the subject was raised by appellant on direct examination. In light of the record as a whole, including the various cautionary instructions to the jury with respect to these matters, we find no abuse of discretion by the trial court.
. See United States v. Girst, (D.C. Cir. No. 77-1604, decided Mar. 28, 1979); United States v. Dorsey, 192 U.S.App.D.C. 313, 591 F.2d 922 (1978).
. 192 U.S.App.D.C. 313, 328, 591 F.2d 922, 937 (D.C. Cir. 1978).
. Fowler v. United States, 374 A.2d 856, 859 (D.C.Ct.App. 1977).
. E. g., United States v. Potts, 540 F.2d 1278, 1280 (5th Cir. 1976); United States v. Savatino, 485 F.2d 540, 544 (2d Cir. 1973), cert. denied, 415 U.S. 948, 94 S.Ct. 1469, 39 L.Ed.2d 563 (1974).
. H.R.Rep.No. 1784, 91st Cong., 2d Sess. 66 (1970) (Conference Report); H.R.Rep.No. 1556, 91st Cong., 2d Sess. 35 (1970) U.S.Code Cong. & Admin.News 1970, p. 5582; see United States v. Lentz, 524 F.2d 69, 71 (5th Cir. 1975), rehearing en banc denied, 526 F.2d 815 (5th Cir. 1976).
. See, e. g., United States v. Trexler, 474 F.2d 369, 372 (5th Cir.), cert. denied, 412 U.S. 929, 93 S.Ct. 2759, 37 L.Ed.2d 157 (1973).
. Only two of eight fraudulent applications did not yield loans in this case.
. Cf. United States v. Girst, supra note 8, slip op. at 10 (transportation in interstate commerce of a firearm by a felon was, on the facts presented, a single offense which could not be punished under two federal statutes).
. United States v. Knight, 166 U.S.App.D.C. 21, 509 F.2d 354, 361-62 (D.C. Cir. 1974), quoting United States v. Canty, 152 U.S.App.D.C. 103, 469 F.2d 114, 126-27 (D.C. Cir. 1972); see United States v. Dorsey, supra note 8, at 930.
. 18 U.S.C. § 1341 provides in pertinent part:
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, . . . for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or takes or receives therefrom, ... or knowingly causes to be delivered by mail . . . any such matter or thing, shall be fined not more than $1,000 or imprisoned not more than five years, or both. [Emphasis added.]
. 18 U.S.C. § 1343 provides in pertinent part:
Whoever, having devised or intending to devise any scheme or artifice to defraud, or*536 for obtaining money or property by means of false or fraudulent pretenses, transmits or causes to be transmitted by means of wire, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined not more than $1,000 or imprisoned not more than five years, or both. [Emphasis added.]
. See, e. g., United States v. Joyce, 499 F.2d 9, 18 (7th Cir.), cert. denied, 419 U.S. 1031, 95 S.Ct. 512, 42 L.Ed.2d 306 (1974); Henderson v. United States, 425 F.2d 134, 138 n. 4 (5th Cir. 1970); Hanrahan v. United States, 121 U.S. App.D.C. 134, 348 F.2d 363, 366 (D.C. Cir. 1965), cert. denied, 389 U.S. 845, 88 S.Ct. 95, 19 L.Ed.2d 111 (1967).
. The mail fraud statute and the wire fraud statute have both been construed as authorizing multiple convictions for multiple fraudulent uses. See, e. g., United States v. Calvert, 523 F.2d 895, 903 n. 6, 903-04 (8th Cir. 1975), cert. denied, 424 U.S. 911, 96 S.Ct. 1106, 47 L.Ed.2d 314 (1976); Henderson v. United States, 425 F.2d 134, 138 n. 4 (5th Cir. 1970).
. See, e. g., United States v. Weatherspoon, 581 F.2d 595, 600 (7th Cir. 1978) (mail fraud and false statements); United States v. Mahler, 579 F.2d 730, 731 & n. 2 (2d Cir.) (mail and wire fraud and securities fraud), cert. denied, 439 U.S. 991, 99 S.Ct. 592, 58 L.Ed.2d 666 (1978).
. Pereira v. United States, 347 U.S. 1, 8, 74 S.Ct. 358, 98 L.Ed. 435 (1954); United States v. Pollack, 175 U.S.App.D.C. 227, 534 F.2d 964, 971 (D.C. Cir. 1976), cert. denied, 429 U.S. 924, 97 S.Ct. 324, 50 L.Ed.2d 292 (1976).
. See text accompanying note 10 supra.
. See Petite v. United States, 361 U.S. 529, 530, 80 S.Ct. 450, 4 L.Ed.2d 490 (1960).
. The policy, as originally stated by the Attorney General, is: “After a state prosecution there should be no federal trial for the same act or acts unless the reasons are compelling.” U.S. Dep’t of Justice Press Release at 1 (Apr. 6, 1959).
For a recent critical discussion of the Petite policy, see Note, The Problem of Double Jeopardy in Successive Federal-State Prosecutions: A Fifih Amendment Solution, 31 Stan.L.Rev. 477, 488-96 (1979).
. See Abbate v. United States, 359 U.S. 187, 79 S.Ct. 666, 3 L.Ed.2d 729 (1959); Bartkus v. Illinois, 359 U.S. 121, 79 S.Ct. 676, 3 L.Ed.2d 684 (1959).
. In Rinaldi v. United States, 434 U.S. 22, 98 S.Ct. 81, 54 L.Ed.2d 207 (1977), the Supreme Court held that federal courts must respect even a belated effort by the Justice Department to invoke the Petite policy. Defendant in Ri-naldi was charged with state offenses and was then indicted for federal offenses stemming from a hotel robbery. He was convicted of the state charges and sentenced to six years’ imprisonment. Subsequent to the state conviction, two federal trials were held, the first having ended in a mistrial. Defendant was convicted of the federal charges after a jury trial, and was sentenced to twelve years’ imprisonment to run concurrently with the state sentence. On appeal from the federal judgment, defendant argued that his conviction violated the Petite policy. The Government agreed and asked the appellate court to remand the case so that the Government could move to dismiss the indictment. After remand, the District Court denied the Government’s motion to dismiss and the Fifth Circuit en banc affirmed the lower court’s ruling. But the Supreme Court vacated the judgment and ordered dismissal of the indictment. In so doing the Court stated that, although the expenditure of judicial and prose-cutorial resources was by then irreparable, “ ‘no societal interest would be vindicated by punishing further a defendant who has already been convicted and has received a substantial sentence in state court. . . Id. at 31, 98 S.Ct. at 86 (quoting Solicitor General).
. See United States v. Jones, 174 U.S.App. D.C. 34, 527 F.2d 817, 821-23 (D.C. Cir. 1975).
. If a United States Attorney believes that a dual prosecution would be appropriate under the “compelling reasons” standard, he or she can request approval from the Assistant Attorney General of the relevant Division and then from the Attorney General. See U.S. Dep’t of Justice Press Release, supra note 25, at 1.
. See Rinaldi v. United States, supra note 27, 434 U.S. at 29, 98 S.Ct. 81 (discussing with approval the “dual sovereignty” principle).
. We note in passing that this case presents another example of “the injustice engendered by the unfettered and generally unguided exercise of that awesome power” of prosecutorial discretion. United States v. Roberts, 600 F.2d 815, 818 (D.C.Cir.1978), rehearing en banc denied (Apr. 30, 1979), cert. granted, - U.S. -, 100 S.Ct. 42, 62 L.Ed.2d 29 (1979). Statement of Bazelon, Circuit Judge, as to why he voted for rehearing en banc, slip op. at 7 n. 12.
The Supreme Court decisions in Abbate and Bartkus, supra note 26, holding that both the federal and state governments may prosecute a defendant for the same act or acts, are grounded in principles of federalism: where the laws of two “sovereigns” are violated, each government may have a legitimate reason for exercising its power of criminal prosecution. But this underlying rationale is absent where a defendant is prosecuted for violating laws of both the United States and the District of Columbia, since the laws emanate from one sovereign. Moreover, the Supreme Court and this court have long recognized that multiple punishments for essentially the same acts are unwarranted except “in instances of particular enormity, or where the public safety demanded extraordinary rigor.” Fox v. Ohio, 46 U.S. (5 How.) 410, 434, 12 L.Ed. 213 (1847), quoted with approval in Rinaldi v. United States, supra note 27, 434 U.S. at 27-28, 98 S.Ct. 81; see United States v. Knight, supra note 16, 166 U.S.App.D.C. 21, 509 F.2d at 351. One may seriously question whether this case satisfies those criteria.
. See, e. g., United States v. Arnold, 543 F.2d 1224, 1225-26 (8th Cir. 1976), cert. denied, 429 U.S. 1051, 97 S.Ct. 765, 50 L.Ed.2d 768 (1977).
. See id. (material misrepresentations on a credit card application support inference of fraudulent intent).
. For discussion of the current high level of consumer debt and the financial inability of many consumers to repay creditors, see NEWSWEEK, Jan. 8, 1979, at 46-54; TIME, Dec. 25, 1978, at 53.
. See United States v. Maze, 414 U.S. at 402-OS, 94 S.Ct. 645.
. See id. at 400, 94 S.Ct. 645 (quoting Kann v. United States, supra, 323 U.S. at 94, 65 S.Ct. 148).
We believe it unnecessary to decide the exact point at which this scheme culminated, whether it be when the lender approved the loan or when the installment sales contract was signed. We only decide that the mailings at issue were too remote to be within the intended coverage of the mail fraud statute.
We also note that, under the Government’s theory, even the regular mailing of each installment payment could constitute a violation of the mail fraud statute. We decline to open the door to such a result, which would impose greater criminal penalties on those who repay loans than on those who intentionally default.
. We recognize that vacating these convictions will not reduce the length of appellant’s maximum sentence, since the mail fraud sentences were concurrent with the remaining sentences on the conspiracy and wire fraud counts. However, this does not bar appellate review and, when necessary, correction. See Benton v. Maryland, 395 U.S. 784, 787-91, 89 S.Ct. 2056, 23 L.Ed.2d 707 (1969); United States v. Knight, 166 U.S.App.D.C. 21, 509 F.2d 354, 359 (D.C.Cir. 1974); United States v. Canty, 152 U.S.App.D.C. 103, 469 F.2d 114, 126 & n.14 (D.C.Cir. 1972); United States v. Hooper,
Dissenting Opinion
dissenting in part:
In my opinion there was sufficient evidence to show that the mailings of the conditional sales contracts to the lenders were in furtherance of the scheme to defraud. Accordingly I would affirm the conviction of Alston on counts 22 through 26. I concur in the other holdings in the court’s opinion.
The purchaser of an automobile was required to apply for credit from a lender and to be approved before a dealer would agree to a conditional sales contract. When the lender gave oral approval of the loan application a contract was sent through the mails which provided for assignment of the dealer’s rights and warranted that the purchaser’s representations in the credit application were true. Receipt of the written contract through the mails was a regular, contemplated and necessary step in the consummation of the loan transaction. These facts were sufficient to demonstrate that the mailings were in furtherance of the scheme to defraud, within the meaning of the statute.
The purpose of the scheme to defraud was to obtain credit and use of an automobile over the loan period. If any of the representations in the contract with respect to the purchaser’s financial history thereafter proved to be false the lender was free to rescind the loan and demand immediate payment. In short, mailing of the written contracts was an essential step in the execution of the scheme to defraud. See United States v. Marando, 504 F.2d 126, 129 (2d Cir.), cert. denied, 419 U.S. 1000, 95 S.Ct. 317, 42 L.Ed.2d 275 (1974); United States v. Owen, 492 F.2d 1100, 1103 (5th Cir.), cert. denied, 419 U.S. 965, 95 S.Ct. 227, 42 L.Ed.2d 180 (1974); United States v. Eskow, 422 F.2d 1060 (2d Cir.), cert. denied, 398 U.S. 959, 90 S.Ct. 2174, 26 L.Ed.2d 544 (1970).
Furthermore in my opinion the mailing of the written contracts promoted concealment of the fraud and therefore was within the condemnation of the statute. United States v. Sampson, 371 U.S. 75, 83 S.Ct. 173, 9 L.Ed.2d 136 (1962); United States v. Pollack, 175 U.S.App.D.C. 227, 534 F.2d 964 (1976), cert. denied, 429 U.S. 924, 97 S.Ct. 324, 50 L.Ed.2d 292 (1977); United States v. Eskow, supra, 422 F.2d at 1069.
. I do not subscribe to the dicta in n.31.
