UNITED STATES of America, Plaintiff-Appellee, v. Kevin Wayne GRAY, Defendant-Appellant.
No. 02-15462.
United States Court of Appeals, Eleventh Circuit.
April 30, 2004.
367 F.3d 1263
In this case, the district court properly denied Hall‘s motion to file a second amended complaint because the three new claims asserted, like those in her first amended complaint, would have been subject to dismissal as a matter of law. The first two new claims were predicated on the existence of a valid insurance contract between Bobby and United at the time of his death. Because the district court properly granted summary judgment on this issue, denial of Hall‘s motion to add these two new claims was proper. Hall‘s third new claim involved fraud allegedly committed against Bobby by both United and his former employer. As the district court correctly noted, however, fraud claims do not survive Bobby‘s death. See Miller v. Dobbs Mobile Bay, Inc., 661 So.2d 203, 205 (Ala.1995). Accordingly, the district court‘s denial of Hall‘s motion to file a second amended complaint as futile was not an abuse of discretion and is affirmed.
III. CONCLUSION
In this appeal, Hall alleged that the district court erred by striking her affidavit and the affidavit offered by her expert, Rocco Petrella. She also alleged error in the district court‘s grant of summary judgment to United and the district court‘s judgment denying her motion to file a second amended complaint. We disagree with all of the arguments proffered by Hall and find no reversible error committed by the district court. Accordingly, the judgment of the district court is AFFIRMED.
E. Bryan Wilson, Tallahassee, FL, Stephen P. Preisser, Pensacola, FL, for Plaintiff-Appellee.
Before TJOFLAT, BARKETT and HILL, Circuit Judges.
TJOFLAT, Circuit Judge:
On September 17, 2002, a jury found Kevin Gray guilty of mail fraud, in violation of
I.
The appellant‘s current predicament can only be understood against the backdrop of the event—the criminal prosecution of a prominent businessman in Pensacola, Florida—that led him to initiate the scheme to defraud for which he was convicted.3 In May, 2000, a Northern District of Florida grand jury indicted Frank M. Patti, Sr., a prominent Pensacola, Florida businessman, on eight counts for filing false income tax returns for himself and one of his companies, Patti Shipyard, Inc., for the tax years 1993, 1994, 1995 and 1996. In Febru
As the federal government closed in on Patti, he took steps to gain sympathy for his side of the case. He professed his innocence to members of the press, and they reported what he said. This publicity, in turn, exposed him to unsavory characters who sought to exploit his legal woes for pecuniary gain.4 Enter the appellant, who devised a scheme to bait Patti into forking over $185,000.00 in exchange for not being sent to prison.
On January 2, 2002, the district court entered an order scheduling Patti‘s trial for April 15, 2002. On Thursday, April 4, eleven days before the trial was to begin, Patti received a FedEx letter delivered to his seafood restaurant in Pensacola. The letter read:
FP., Your current predicament has been brought to our attention by a mutual friend & colleague Your files from Memphis, Butner,5 Pensacola & Tallahassee have been reviewed by our associates This case against you and AG6 gives the government an 80/20 favorable conviction Our mutual friend is concerned for your well being and has asked us to intervene This is not a prank but real serious business & it is imperative you believe in the contents of this letter & follow the advice & directions given Do not discuss this info with anyone including AG & Comisky7 You are a deep pocket figure to him only & he is a liability to all involved We can assure you & AG of no imprisonment but you must pay the agreed tax settlement issued by the court You are facing a long incarceration stay & Collier, Davies & Hensel8 are using you to inhance [sic] their career [sic] If you wish to continue with our help follow these directions step by step Insert the words . . . YES WE HAVE . . . in front of the words SHRIMP, OYSTER & CATFISH on your digital flashing sign out front of Joe Patti‘s This will allow our associates in Pensacola to inform us of your intentions . . . The pay phone on the corner of Main & Palafox will ring Saturday 4-06-02 at 2:10 & again at 2:10 Sunday The phone is located in front of The Daily Grind Café You must answer the phone by saying . . . Hello this is Jack Simmons . . . You will use this name for future conversation Do not ask questions just follow the directions given Do not bring any recording devices just a pen & paper
You will be observed at all times Your future rest [sic] in your hands & many people have risk [sic] political & military careers to assist you The importance of extreme silence is essential
Good luck
HWH
This letter, which evinced a concrete level of knowledge with respect to the parties involved in Patti‘s legal predicament, represented a “ray of hope” for the businessman who was facing the prospect of prison sentences totaling ninety-six years.9 Thus, the following Saturday, April 6, he went to the pay phone by the designated café. There, he received the expected phone call shortly after 2 p.m.; the caller asked him if he was, in fact, “Jack Simmons.” After Patti acknowledged that he was, the caller instructed him to return to his truck and await a second call at the pay phone. The call never came. When he returned to his place of business, however, he received another call from the same unknown person, again asking him if he was “Jack Simmons.” This time, the caller reiterated what he had written in his letter to Patti and added that United States Senator Jesse Helms,10 some congressmen, and a five-star general were inclined to help emancipate Patti from his legal troubles.
After dangling the promise of political leverage, the caller instructed Patti to package $120,000 in six bags and to write down a series of numbers and letters signifying the amounts of that money intended to go to specific jurors.11 In exchange for the money, the caller promised Patti that he would serve no jail time. However, the caller‘s disclosure to Patti that some of the money would be used to bribe jurors alerted Patti that there was something suspicious about the caller‘s intentions. As Patti testified at the appellant‘s trial, “When J-1 came out of the phone I knew this was nothing but extortion, and I listened on. I didn‘t hang up. I was—I didn‘t believe in that. And he told me what was—what to do, and I knew this was just—this—this was just baloney.”12
Shortly after this realization, Patti contacted his attorney, Ian Comisky, who in turn informed federal authorities of what was occurring. They told Patti to take the caller‘s bait and that the FBI would tape any phone calls he received from the caller. Growing bold at the prospect of receiving $185,00013 in cash, the caller re
On May 8, 2002, a federal grand jury in the Northern District of Florida returned an indictment charging the appellant on one count of mail fraud. He pled not guilty, and the case proceeded to trial before a jury. The jury, having received evidence establishing the facts set forth above, found the appellant guilty, and the district court sentenced him to prison for twenty-eight months. This appeal followed.
II.
A.
The appellant‘s initial attack on his conviction is that the evidence was insufficient to make out a case of mail fraud. He bases this attack on United States v. Brown, 79 F.3d 1550 (11th Cir.1996). There, we said that to prove the crime of mail fraud, the Government must establish that the defendant “intended to create a scheme ‘reasonably calculated to deceive persons of ordinary prudence and comprehension.‘” Id. at 1557 (citation omitted). Additionally, it must show that the defendant took some action in furtherance of his scheme—to bring it to fruition—in the form of a material misrepresentation made to the would-be victim that “a reasonable person would have acted on.” Id.15 It is on this peg that the appellant hangs his hat, contending that a reasonable person would not have acted on his representations when considered as a whole. In bolstering his argument, he draws attention to his statement to Patti that $85,000 would be needed to bribe three of the jurors who would be trying his case: $35,000 for J-1, and $25,000 each for J-2 and J-3.16 The appellant contends that a reasonable person would know that since the pool from which these jurors would be selected would not be known until April 15—when the pool assembled at the courthouse for the trial—the representation had to be phony.
While it is true that statements like the one he cites would seem absurd or fanciful to a reasonable person, the mail fraud statute does not require that every representation a defendant utters while executing his scheme must be credible. Instead, the statute requires proof that the defendant‘s scheme to defraud involved the use of material, false representations or promises. See
In the letter, the appellant made a false promise: “[w]e can assure you . . . no imprisonment but you must pay the agreed tax settlement issued by the court.” In addition, he falsely represented that an undisclosed number of sympathizers—including “[o]ur mutual friend” and “our associates in Pensacola“—would work to extricate Patti from his legal predicament if the businessman would agree to follow certain instructions. True, the letter did not identify precisely how the writer and these sympathizers would help Patti, but this omission did not render the letter devoid of any material misrepresentations that were capable of prompting a reasonable person to act as Patti did.17 What the appellant overlooks is that the mail fraud statute “punish[es] unexecuted, as well as executed, schemes. This means that the government can convict a person for mail fraud even if his targeted victim never encountered the deception—or, if he encountered it, was not deceived.” Pelletier v. Zweifel, 921 F.2d 1465, 1498 (11th Cir.1991) (citations omitted). All that the Government needs to show to establish the mens rea element of the offense is that the defendant anticipated the intended victim‘s reliance, and the appellant‘s anticipation of Patti‘s reliance can be inferred from, among other things, the fact that he was prepared to call Patti at the pay phone at the time and location specified in the letter. See id. at 1503.
Because the letter received by Patti contained false, material representations from the appellant as part of an effort to receive cash payments from the desperate businessman, the crime of mail fraud was complete when the appellant delivered the letter via FedEx to Patti. See United States v. Crossley, 224 F.3d 847, 859 (6th Cir. 2000) (“the offense of mail fraud is completed and the statute of limitations begins to run on the date on which the defendant, depending on the specific use of the mails charged in the indictment, ‘places,’ ‘deposits,’ ‘causes to be deposited,’ ‘takes,’ or ‘receives’ mail, or ‘knowingly causes’ mail ‘to be delivered’ as part of the execution of a scheme to defraud.“); United States v. Kennedy, 64 F.3d 1465, 1478 (10th Cir.1995) (“The ‘completion’ of both wire and mail fraud occurs when any wiring or mail
We also note that this case is distinguishable from Brown because, unlike the claims made by the Brown defendants, the appellant‘s nebulous representations to Patti (promising to interfere illegally with a federal prosecution) did not lend themselves to easy verification when Patti received the mailing precisely because the false promises that were made concerned illegal activity.18 Because the fraudulent promise in this situation encompassed illegal activity which by its nature tends to operate by clandestine means, Patti could not easily verify or investigate the accuracy of the appellant‘s representations “by a telephone call or a visit . . . to a competitor, or by a look at newspaper classified ads.” Cf., Brown, 79 F.3d at 1559. In other words, there was no information readily accessible in the public domain which Patti could immediately obtain to confirm or disprove the letter‘s representations. Cf. Assoc. in Adolescent Psychiatry, S.C. v. Home Life Ins. Co., 941 F.2d 561 (7th Cir.1991) (no scheme to defraud where “[t]he relation between the rates offered . . . and those available on other investments can be checked by a quick look at the Wall Street Journal or the Chicago Tribune“); Blount Fin. Serv. v. Walter E. Heller & Co., 819 F.2d 151 (6th Cir.1987) (no scheme to defraud where reliance on the defendants’ statement was unreasonable because the fraudulent representations could have been contradicted
B.
The appellant next contends that the district court erred when, in charging the jury, it provided the jury with two inaccurate statements of the law. Whether a district court‘s instruction mischaracterized the law or misled the jury to the prejudice of the defendant presents a question of law that is subject to de novo review. United States v. Deleveaux, 205 F.3d 1292, 1296 (11th Cir.2000).
The relevant portion of the jury instruction challenged by the appellant reads as follows:
A statement or representation is false or fraudulent if it relates to a material fact and is known to be untrue or is made with reckless indifference as to its truth or falsity and is made or caused to be made with intent to defraud. A statement or representation may also be false or fraudulent when it constitutes a half truth or effectively conceals a material fact, provided it is made with intent to defraud.
A fact is material if it has a natural tendency to influence or is capable of influencing the decision of the person or entity to whom or to which it is addressed. A false or fraudulent statement, representation or promise can be material even if the decision maker did not actually rely on the statement or even if the decision maker actually knew or should have known that the statement was false.
To prove a fraud crime the government must show that the defendant under consideration intended to devise or participate in a scheme reasonably calculated to deceive a person of ordinary prudence and comprehension under the same circumstances. The person of ordinary prudence standard is an objective standard and is not directly related to the level of knowledge and experience of any specific person. For purposes of this offense the government must prove that a reasonable person of average prudence and comprehension under the same circumstances would have acted on the representation made by the defendant.
According to the appellant, the court got off track when it instructed the jury on the definition of a “material” fact. Specifically, he contends that the instruction improperly stated that “[a] false or fraudulent statement, representation or promise can be material even if the decision maker did not actually rely on the statement or even if the decision maker actually knew or should have known that the statement was false.” We find no merit in this contention because the district court‘s language is a correct statement of law and mirrors the language this court crafted in United States v. Neder, 197 F.3d 1122, 1128 (11th Cir.1999).
The appellant next challenges the district court‘s instruction to the jury not just “to look at a person of ordinary prudence, as Brown instructed, but to look at a person of ordinary prudence in the peculiar situation facing Mr. Patti.” The portion of the charge at issue reads, “For purposes of this offense the government must prove that a reasonable person of average prudence and comprehension under the same circumstances would have acted on the representation made by the defendant.” (emphasis added). The appellant contends that this instruction is problematic because by advising the jury to consider the “same circumstances” faced by the victim of the fraud, the court implicitly rejected the dictates of Brown, where we said that “[t]he ‘person of ordinary
First, we note that the district court correctly included in its instructions to the jury that “[t]he person of ordinary pruden[ce] standard is an objective standard and is not directly related to the level of knowledge and experience of any specific person.” This correct statement of the law militates against the error the court supposedly committed. Second, we note that while some inconsistency may be found between this part of the instruction and the “under the same circumstances” language found elsewhere, the appellant can hardly claim unfair prejudice in this instance because the Government was entitled to go into Patti‘s circumstances to the extent necessary to prove that the appellant had the statutorily required mens rea, or intent, to deceive and defraud Patti. The Government has the prerogative, if not the duty, to inform the jury of the would-be victim‘s (in this instance Patti‘s) circumstances, as seen through the mind of the defendant, to help enable the jury to determine whether the defendant had the requisite intent to defraud his selected victim(s). Similarly, the jury was required to consider Patti‘s circumstances in deciding whether the materiality element of the mail fraud statute was met.19 Accordingly, it was not improper for the jury to consider Patti‘s circumstances in making its final determination as to the appellant‘s guilt.
Finally, it is worth observing that as a practical matter, even the objective, reasonable person of ordinary prudence standard must be anchored in reality and connected to the material circumstances surrounding the victim or the intended victim of a scheme to defraud if it is to serve a useful function in guiding a jury‘s deliberations. Stated differently, if a jury could not take into account the material circumstances surrounding a scheme to defraud, almost no mail fraud conviction could be upheld in cases where the victim faced a “peculiar situation” far removed from the circumstances with which most people of ordinary prudence are generally familiar, and where, as in the instant case, the defendant tailored his scheme to defraud that particular individual because of the unique circumstances confronting the victim.20 We do not see Brown as
C.
As a last measure, the appellant questions the district court‘s decision to consider his prior convictions (for communicating threats) in determining his criminal history category under the Sentencing Guidelines. See generally
In Shelton, the Court stated that an indigent defendant who receives a suspended or probated sentence to imprisonment has a constitutional right to counsel. This holding in effect acknowledged that indigents are entitled to appointed counsel “in any misdemeanor case that ‘actually leads to imprisonment.‘” Shelton, 535 U.S. at 661, 122 S.Ct. at 1769 (citing Argersinger v. Hamlin, 407 U.S. 25, 33, 92 S.Ct. 2006, 2010, 32 L.Ed.2d 530 (1972)). As the district court noted, however, the North Carolina court specifically found that the appellant was not indigent and therefore did not qualify for the appointment of counsel.22 Thus, it was left to him to determine whether he wanted to hire his own attorney or represent himself, and, as the district court correctly noted, the North Carolina court‘s record conclusively established that on November 18, 1996, the appellant executed a waiver of counsel and then chose to enter a guilty plea to the offenses. Because he waived his right to counsel and did not qualify for the appointment of counsel, Shelton does not apply here.
In the wake of these findings, the district court could not have discounted the appellant‘s prior conviction in North Carolina absent a showing that his waiver of counsel was somehow flawed or that the North Carolina court erroneously refused to designate him as indigent. See United States v. Phillips, 120 F.3d 227, 231 (11th Cir.1997) (“The result is that in sentencing a defendant a district court cannot ignore or discount for any purpose a prior convic-
AFFIRMED.
BARKETT, Circuit Judge, dissenting:
I respectfully dissent, finding the majority opinion in conflict with United States v. Brown, 79 F.3d 1550 (11th Cir.1996).1 Brown holds that “[t]o prove a crime [of mail fraud], the government must show the defendant intended to create a scheme reasonably calculated to deceive persons of ordinary prudence and comprehension.” Id. at 1557 (emphasis added) (internal citation omitted). I cannot accept that the scheme or representations in this case could be “reasonably calculated to deceive persons of ordinary prudence and comprehension.”
We found in Brown that agents of a large real estate developer who made material misrepresentations in an attempt to lure customers from snow-belt states into buying overpriced homes were not guilty of mail-fraud because “reasonable jurors could not find that a person of ordinary prudence, about to enter into an agreement to purchase a . . . home in Florida, would rely on . . . the seller‘s own affirmative representations about the value or rental income of the . . . homes.” 79 F.3d at 1559.
I find it impossible to reconcile how a prudent person would not rely on a large developer‘s official-looking but false or misleading real-estate appraisals; but that a prudent person (albeit, this time facing serious criminal charges) would rely on the anonymous communications in this case.
The majority asserts that the crime was complete at the time of the first communication, in which the anonymous author misrepresented that “we can assure you . . . no imprisonment” and that certain mutual friends were willing to aid Patti in this respect. However, the letter containing that communication reeked of unreliability: the letter requires that Patti not tell anyone about the communication (“[d]o not discuss this info with anyone, including [your associate and lawyer]“); the letter requires Patti to assume a code name (“[y]ou must answer the phone by saying hello, this is Jack Simmons“); it requires that he should communicate secret messages (“[i]nsert the words . . . yes, we have . . . in front of the words shrimp, oysters and catfish on your digital flashing sign out front of Joe Patti‘s“); it guarantees the result in a criminal case, irregardless of guilt (“[w]e can assure you and A.G. of no imprisonment, but you must pay the agreed tax settlement issued by the court.“); and it is anonymous. No doubt the unbelievable nature of the communication motivated the author to self-consciously assert that “[t]his is not a prank but real serious business.”
If “reasonable jurors could not find that a person of ordinary prudence, about to enter into an agreement to purchase a . . . home in Florida, would rely on . . . the seller‘s own affirmative representations about the value” of the properties at issue in Brown, how can it possibly be said that a reasonable juror could find that a person
Because the initial letter was not designed to deceive a person of ordinary prudence, I do not believe the crime of mail fraud was completed by the mailing of that communication. Subsequent communications similarly failed to lend any credibility to the scheme. Indeed, the first conversation Patti had with Gray quickly dispelled any notion Patti had that the representations were genuine;2 just as it would have dispelled any hint of reliability for a reasonable person. The caller created a fantastic conspiracy theory complete with mysterious five-star generals and famous senators.3
I therefore respectfully dissent.
UNITED STATES of America, Plaintiff-Appellee, v. Darius HEARD, Defendant-Appellant.
No. 03-14811.
United States Court of Appeals, Eleventh Circuit.
April 30, 2004.
Notes
Whether or not we agree with this Court‘s decision in Brown, we are bound by it. United States v. Hogan, 986 F.2d 1364, 1369 (11th Cir.1993) (“[I]t is the firmly established rule of this Circuit that each succeeding panel is bound by the holding of the first panel to address an issue of law, unless and until that holding is overruled en banc, or by the Supreme Court.“).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, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, 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 deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
Despite the majority‘s assertions to the contrary, the amount of risk involved is central to a determination of whether a reasonably prudent person would participate in the proposed transaction. See Majority Opinion, Note 18. Indeed, “prudence” is defined as “attentiveness to possible hazard or disadvantage” and “prudent” is synonymous with “cautious.” Webster‘s Third New International Dictionary 1828 (1993). Furthermore, risk-aversion is intimately related with “reasonableness.” See, e.g., Bourg v. Texaco Oil Co. Inc., 578 F.2d 1117, 1121 (5th Cir.1978) (approving trial court‘s jury instruction that stated: “A prime consideration in determining reasonableness is the possible risk in the particular situation. Naturally, the greater the risk of danger in any given situation, the greater the caution that will be exercised by the reasonably prudent person. That is, as the risk of danger increases, the reasonably prudent person exercises more and more care.” (emphasis added)).
The “bizarre result” the majority fears is really an expression of dissatisfaction with our holding in Brown that a mail fraud scheme must be calculated to deceive “persons of ordinary prudence.” Once again, whether or not we believe this should be the rule, we are nevertheless bound by it.
Q: And you knew it was a baloney and a hoax, because—
A: You don‘t bribe jurors.
Q: You knew that that was unreasonable even to say something like that?
A: It‘s impossible.
Q: Impossible to bribe a juror?
A: I would think so.
Q: Okay? Is that what you thought?
A: Yes, sir.