United States v. Larry Hammond, A/K/A Larry Hoover

WISDOM, Before GOLDBERG VANCE, Judges. Circuit GOLDBERG, Judge: Circuit defendant-appellant was convicted in court of wire fraud and federal district of 18 U.S.C. in violation securities fraud ff, 78j(b) and 17 and 78 §§ U.S.C. § sever- appeal he raises C.F.R. 24.10b-5. On convictions. challenging his arguments al below, For the reasons stated the wire U.S.C. district court telephone were based on fraud convictions be reversed. should Peis- calls between resulted from convictiоns The defendant’s plans for ner discussed the a scheme defraud participation brokerage house. defrauding the An FBI undercover brokerage house. argues that the The defendant played a the agent Peisner named jurisdiction for subject the lacked matter believed Peisner scheme. The defendant claims two fraud convictions. He wire good credit person was a who jurisdictional of 1343 cannot element § bankruptcy. Under the about to declare supplied, as it be met when that element is scheme, brokerage order his Peisner was to case, solely by contacts between 150,000 him on credit purchase house to agents. government the defendant and I, Inc. in I & The defendant shares of stock to the defendant’s ar- steps There are two Although this stock. allegedly controlled First, requisite gument. claims that the share, the stock was traded $3 foreign communication must interstate or actually worthless. The scheme was of” defendant’s be “in furtherance brokerage work follows: After house as And, second, he argues scheme defraud. stock, renege would purchased the Peisner “in fur- that a communication cannot be bankruptcy. on and declare agreеment his if it is therance of” the scheme defraud purchase stock money The from the government secretly made to defendant, find to the defend- In to frustrate the scheme. other intends $25,000 his pay ef- ant would words, interpret the defendant would forts, brokerage house would be and the foreign requiring an interstate or § deal, The left with the worthless stock. actually ‍​‌​​‌​‌​‌‌​‌​‌​‌‌​‌‌​‌​​​​‌​​‌​‌‌​‌​​‌​​​​‌‌‌‌​​‍furthers the communication however, completed. Peisner in- scheme to defraud. Exchange formed the Securities Com- interpretation The § defendant’s mission, trading suspended provide is incorrect. Section 1343 does The was indicted for his stock. defendant foreign the interstate or communica- scheme, activities in connection with the be “in of” the scheme tion must furtherance participation, on basis of provides only to dеfraud. com- guilty found him of wire fraud and purpose munication be made “for the must securities fraud. executing such scheme.” U.S.C. certainly 1343. And one can make § I. purpose executing communication for scheme, even when that communication The on defendant’s first scheme. In actually does not further under concerns his convictions fact, recent United States v. our decision (“§ 1343”). federal wire statute. fraud Patterson, 1976), 528 F.2d 1037 provides: That statute requires establishes that § Whoever, having intending devised or or cause to transmit defendant transmit defraud, any devise scheme or artifice to communication, foreign an interstate or in- obtaining money property by or for or help will tending that the communication pretenses, means of fraudulent false or require- is no further the scheme. There reprеsentations, promises, or transmits or fur- ment that communication causes to be transmitted means ther the scheme. wire, radio, or television communication commerce, foreign interstate scheme was or Patterson the defendant’s writings, signs, signals, pictures, company by selling phone or to defraud the executing “blue purpose sounds for the called boxes.” such electronic devicеs artifice, phone scheme or shall be fined not When a blue box is attached $1,000 imprisoned long more than calls without or not more one can make distance years, phone company. five To being charged by than or both. going were es, agents worked, government how the device demonstrate on the defendant. “push” the scheme opera- long distance dialed defendant the defendant claimed was witnesses cities. The defendant in several tors way.” do the deal “unwilling to this demonstration when he made unaware set the agents going telephone was a potential customer that his with him “because up even security agent. The court held the introduction of With Although the calls of deal.” within calls fell evidence, compa- the burden phone actually defraud thе did not beyond a reasonable calls, prove they were not toll ny, since executing” the doubt that the defendant purpose “for the made the offenses. were made to commit because fraudulent scheme potential box to a the blue to demonstrate claims, This, po- not matter It did customer. however, jury, not do. The did secretly was someone customer tential And, examining after thought otherwise. the scheme. to frustrate intended record, that there was evidence we find the talked in this case the defendant When beyond a jury could conclude from which a Peisner, the de- agent with phone on the the defendant reasonable doubt was an was unaware that Peisner fendant offenses. to commit the predisposed Peisner as his thought He agent. FBI the defendant There wаs evidence scheme, and in these accomplice in the the the I & I stock and controlled calls, to explained phone the defendant share, was stock, traded at although $3 supposed to exactly what he was Peisner also The evidence actually worthless. then, Clearly, the defendant made do. dealings agent with to his showed intending phone calls Peisner, had to var- the defendant tried the help execute the scheme to defraud purchase the stock with- ious to individuals shows, Patterson this brokerage house. As that he controlled the stock telling them out calls within bring is sufficient to the Instead, the de- worthless. or that that he knew told these individuals fendant II. He going to rise in value. the stock was second The defendant’s expect- this explanations for gave different defensе. Under entrapment concerns his these individuals value. He told ed rise in the defendant entrapment, law of once the buy himself but to the stock that he wanted government the evidence that shows some He have the cash. not then that he did offense, the the him to commit induced' buy the purchasers to prospective the asked prove be government the burden is on that he could later hold it sо stock and doubt that the defendant yond a reasonable prospective All the it from them. purchase commit the offense. predisposed to rejected the deal. purchasers Benavidez, F.2d v. United States have jury the could this evidence From 1977) (5th v. Timber Cir. United States meeting agent Peis- that before concluded lake, 1375, 1379 1977). 559 F.2d planning to defraud ner the defendant the government proves that this the the causing purchase him to someone entrapped. defendant Moreover, according to worthless stock. idea, Peisner, it was the defendant’s agent ‍​‌​​‌​‌​‌‌​‌​‌​‌‌​‌‌​‌​​​​‌​​‌​‌‌​‌​​‌​​​​‌‌‌‌​​‍presented the defendant In this case the bro- to defraud A not the inducement. government evidence of that he ar- Peisner testified kerage house. testimony of two stipulation containing the defendant, posing as the ranged tо meet was read absent defense witnesses was about credit but who person good government the indicated that jury. he had bankruptcy, because the bro to declare to defraud thought up the scheme looking for that the defendant these witness- learned According to kerage house. in footnote 5. stipulation 1. The complete quoted suggestion, the the At court’s fraud perpetrаte a person just such two wit- to what stipulate all brokerage house. From against a taken have said nesses would beyond a evidence, could stipulation to read the judge The stand. doubt reasonable jurors jury, advising the offense. to commit testimony same give stipulated live would have testi- weight III. stipulation testi- mony. contained argues that defendant Finally, discussed mony of inducement the case have dismissed should gist II. The intimidated because agents planned “push” govern- He claims witnesses.2 brokerage house scheme to defraud the de- important of two intimidation ment’s “unwilling” defendant. them refuse caused witnesses recognized testify. has a constitu that a criminal defendant witnesses, Parsons, had Mr. One of these right “present his witnesses to tional own testified and cross-examined already Texas, Washingtоn establish defense.” During recess. when court called a 1920, 1923, 388 U.S. approached Par- recess, FBI (1967). ele an L.Ed.2d Parsons that he knew sons. Peisner told guaranteed ment law about in Colorado.” the “situation clause.3 in a state matter Colo- been indicted types gov Cases have held various work rado to there to and had deprive the de ernmental interference capacity. with assistance the FBI an Texas, Webb v. right. g., E. fendant this if he “continued Peisner told Parsons 351, 95, L.Ed.2d 330 409 93 S.Ct. 34 U.S. on,” “nothing trouble” in have he would (1972) (defense by witness intimidated re morning Parsons Colorado. The next both judge); v. of trial United States marks witness, had not and the other defense Henricksen, 1977) (5th F.2d 197 Cir. 564 subpoenaed yet any testimony, (defense by terms of witness intimidated further appear grand to before a Morrison, bargain); v. plea United States I investigation of the I & stock. (3d 1976) (defense witness 535 F.2d 223 Cir. events, to After these Parsons refused by remarks assistant United intimidated de- give further and the other Thomas, v. attorney); United States States testify all. The refused to witness (6th 1973) (defense witness 488 F.2d 334 Cir. about what had informed the court secret service remarks of intimidated transpired. he judge told the case). in the This circuit involved testified, if he follows, feared that “sub recently the rule as stated him trial. Ac- would hurt in his Colorado with a de stantial interference attorney, the defense the other cording unhampered to choice fense witness’ free testify rights refused to because of testify process” witness due of the to violates Henricksen, subpoena and because he had learned of v. defendant. United States 1977). (5th between Parsons and Peisner. F.2d 197 Cir. conversation 564 Texas, Washington Supreme v. Court held in- 2. defendant also claims there was support right to fair sufficient the verdict. that the was so fundamental evidence opinion incorporated this Due I and II of show that in the Process Parts it was Accordingly, hold claim without merit. amendment. the fourteenth Clause Cases, ‍​‌​​‌​‌​‌‌​‌​‌​‌‌​‌‌​‌​​​​‌​​‌​‌‌​‌​​‌​​​​‌‌‌‌​​‍support then, there sufficient evidence have based on due since the verdict. process rights to the sixth without reference Texas, 95, g., Webb 409 U.S. E. v. amеndment. right present “to witnesses to establish 351, (1972); United 330 93 S.Ct. 34 L.Ed.2d specifically the sixth defense” found in Henricksen, (5th Cir. v. 564 F.2d States right compulsory process. amendment 1977). this will likewise We refer Texas, 14, Washington v. 388 U.S. 87 S.Ct. process right. due However, (1967). Webb, both the third case, On basis certainly reason to inter defense witness Parsons able for the sixth circuits have stated comments as threats pret agent Peisner’s finding prejudice require would not testify. if Parsons continued retaliate because of to reverse a conviction this order comments, Parsons did Because of process violation. type of due United Accordingly, we testify. find refuse Morrison, (3d v. 535 F.2d 223 Cir. States constituted a agent Peisner’s comments Thomas, 1976); United F.2d States governmental interference” “substantial 1973). agree We with their defense witness Parson’s “free analysis type of Webb and hold that this testify.” We there unhampered choice to process violation is harmful se. due governmental inter fore conclude that deprived the defendant of his due ference support great We find a deal of Be process right present his witnesses. interpretation of Webb. The viola cause we hold that this previously held that there are reversal, reach the requires tion we dо not to which some constitutional violations whether, under the circumstanc question of apply, harmless error rule does see issuance of es of this California, Chapman v. also violated the defendant’s subpoenas 824, 828, (1967), n.8 and we 17 L.Ed.2d process rights. feel that this constitutional violation is a proc- claims that the due prime candidate for such treatment. One require ess violation in this case should not reason is that this due violation will argues reversal. harmful, always almost and it will be prejudiced by this constitutional viola- very a court to determine difficult for when tion and that under the harmless error rule it is not. This is because a court will sel- judgment we should affirm the of the dis- exactly dom be able to determine what trict court. The defendant claims that he brought evidence would have been out had prеjudiced. argues But he also that we testify freely. the witness been allowed to must reverse the even absent Furthermore, showing prejudice; argues since a constitutional viola- inapplicable involved, harmless error rule is to this tion is a court would have to be constitutional violation. able to that the absence of this conclude testimony beyond unknown was harmless is based on the Even if a rеasonable doubt. per Court’s decision in Webb v. Tex- curiam as, 351, 34 L.Ed.2d 330 requisite certainty U.S. S.Ct. say could with the that (1972). In Webb the held that the testimony not have the omitted would remarks, judge’s threatening trial directed case, changed the outcome of the the de- witness, only effectively at the sole defense attempt be allowed to fendant still should drove that witness off the stand and thus presenting change that outcome his deprived process the defendant of his due supports witnesses. A final reason our con- majority rights. The reversed the defend- imagine that clusion. We cannot such a burglary ant’s conviction because of this process violation of due would result from constitutional violation. Justice Blackmun anything intentional conduct on the but Rehnquist wrote a dissent which Justice government, of the and a sе rule joined. While the dissent would the best deterrent to such con- be judge’s improper, it remarks were duct. thought majority wrong sum- marily reverse the case without determin- California, Chapman ing whether the defendant was (1967), may S.Ct. prejudiced by the error. The dissent noted open a hatch for harmless constitutional “overwhelming that although there was ev- aperture is not so appear, error to but its case, guilt” majority idence of rights gargantuan are constitutional accepted only allegation nonetheless a “bare infinitesimality. prejudice.” We must be of Id. 93 at 354. minimized to be contrary, the defendant must not to the justice of are not the scales confident tilted, Chapman are skewed. The not of the oral word. deprived not to be rule was intended harmless error case, testimony especially live prosecutorial error. cover-up every credibility of these de- since the important what really as Band-Aid intended directly issue: witnesses was circumstances, minor, albeit is, under the gave the defense witnesses government and constitutional, The constitu- legal abrasion. govern- of the conflicting versions sharply cosmic concepts or speaks tion in cosmic Finally, ‍​‌​​‌​‌​‌‌​‌​‌​‌‌​‌‌​‌​​​​‌​​‌​‌‌​‌​​‌​​​​‌‌‌‌​​‍thе role the offenses. ment’s grudging- not they are to be principles, and poorly itself was so worded stipulation We must be ly applied nor miniaturized. jury.5 undoubtedly We can- confused purgatory of the harmless careful lest balancing perfect the scales not be erode our sacred constitution- error doctrine rights. left with justice, al but if we are doubt tilted, they have we must which direction rule the harmless error Even if weighted they against not certain are be viola applicable process to this due We must certain the defendant. tion, judgment we still reverse the would avoirdupois not on defendant’s testimony the district court. we might guess, we very important two defense witnesses side. entrapment since surmise, to the defendant’s defense might might hypothesize, we pre it refuted the evidence beyond a reasonable we could important testimony disposition. This preju- doubt it not would have been more effective had violation. diced Certainly, by stipulation.4 been introduced the de- Because violated impact than a testimony live can have more present fendant’s jury. stipulation is statement to the A read witnesses, judgment of the reverse vitality. syn It is a deprived static and However, at a court. new trial district thetic for the oracular declara substitute able to the live defendant should be obtain tions of a witness. The written word testimony of two defenses witnesses. equal depersonalization be no verbalization, Accordingly, we compelling circumstances reverse “Thereafter, spoke course, stipulated next time he to him as to Of June, they perhaps week in at which what the the first witnesses have stated They stipulate did deal was taken stand. time Crawford told Parsons that the way; true. their it inten- done that done tionally up; wanted set him following 5. The states that the up; record on into him induced him to set jury: stipulation which was is the read getting even and the deal because situation, they getting Berger: were even because of “Mr. I As understand about, deal, which even know there а number of conversations. he didn’t were April, around the end the last Sometime come down. April, in week there were be- conversations was ‘he’? “The Court: Who Berger: tween and in Mr. Crawford Mr. Parsons “Mr. Mr. Parsons. Mr. down, Mr. Crawford told Mr. Parsons of did not know it had come deal, new which was the individual who completed, that Hammond had not and filing a would have credit but who money any all or Crawford petition bankruptcy, аnd Mr. in at that time money supposed get. he he Because Crawford, Parsons told Mr. T don’t want why money, that’s the deal didn’t deal, part of that leave me of that com- out supposed up with who was set the individual said, know, pletely,’ you he and or Crawford bankruptcy damage the bro- into and going he and Duradio were to sell that deal effect, they that, why kerage firm and in is they going and deal were seeking dеal Hammond.” worked on going and sell Hammond “stipulation” transcript of way push Hammond deal. That’s judge’s part taken in the way done and it’s want that’s after the incident between chambers going to be. witness Parsons. defense willing “That to do Hammond push way going it. deal that argue does not now that he is Hammond for a remand the case court and the district urges only He to a new trial. entitled new trial.6 egre- miscоnduct was so government’s and REMANDED. REVERSED court erred the district gious That contention dismissing the indictment. concurring in VANCE, Judge, Circuit majority. rejected correctly dissenting part: part' circumstances, particular Under II and most of parts I and I concur the new grant Hammond rather than opinion, but dissent majority III of the I would affirm. objected, he to which Hammond’s conviction. as to reversal of unquestionably im- government’s have entitled Ham- conduct would proper one. if he had desired

mond to a mistrial fact, objected to mistrial In

He did not. stipulation. of a on the basis proceeded strategy Hammond matter of defense

As a

gambled and lost. police. geous The defendant argued conduct of the on appeal 6. The defendant also case, however, proved government’s in these offenses involvement that, government’s principles in these offenses outrageous involvement was so under record, States, outrageous. Hampton the exact was so On v. United enunciated played (1976), is unclear. At ‍​‌​​‌​‌​‌‌​‌​‌​‌‌​‌‌​‌​​​​‌​​‌​‌‌​‌​​‌​​​​‌‌‌‌​​‍a role the 96 S.Ct. Hampton, will be able to call his new trial the defendant five it should bar his conviction. testify justices open possibility witnesses and that a court defense left participation. could, process grounds under or on due fully develop supervisory powers, defendant will be able bar the conviction of a Hampton claim. the outra- because of

Case Details

Case Name: United States v. Larry Hammond, A/K/A Larry Hoover

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Jul 16, 1979

Citation: 598 F.2d 1008

Docket Number: 78-5179

Court Abbreviation: 5th Cir.