UNITED STATES OF AMERICA, Plaintiff-Appellee, v. TRACY RATLIFF-WHITE, Defendant-Appellant.
No. 06-1960
United States Court of Appeals For the Seventh Circuit
ARGUED NOVEMBER 28, 2006—DECIDED JULY 10, 2007
Before FLAUM, MANION and WILLIAMS, Circuit Judges.
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 04 CR 10—James F. Holderman, Chief Judge.
Ratliff-White now appeals, contending that her wire fraud convictions must be reversed because the VA deviated from the standard electronic multi-step pаyment
I. BACKGROUND
In November 2001, Ratliff-White asked Hines Veterans Administration Hospital (“Hines VA“) located near Chicago, Illinois to provide her with 24-hour companion care to help cope with recurring flashbacks associated with her post-traumatic stress disorder. Because Hines VA did not have sufficient resources to providе that level of care, it hired or attempted to hire private care-taking companies. Two different companies contracted with the VA to provide companion-care services to Ratliff-White, but finding her a difficult client, both companies terminated their contracts with the VA after one month. A third company declined to provide services after an initial meeting with Ratliff-White, and Hines VA then told her she would have to locate appropriate companion-care services on her own.
In April 2002, Ratliff-White approached Dorothy Norwood, an employee of one of the home health care companies that had previously provided services to Ratliff-White, about forming a care-taking company called Compassionate Home Health Services (“CHHS“). Rаtliff-White appointed herself president of CHHS, responsible for hiring employees and handling invoices and employee time sheets, and offered Norwood the position of vice president. Ratliff-White explained that as vice president,
Over the next several months, Ratliff-White prepared and Norwood faxed to Hines VA invoices and time sheets purportedly reflecting services performed by CHHS employees. But the individuals identified on the time sheets were never employed by CHHS and no services were ever performed. According to Norwood‘s daughter, who occasionally assisted in typing invoices and time sheets, Ratliff-White once confided that some of the names on the time sheets were “made-up” and that the services on the time sheets and invoices had not been performed.
Relying on the false time sheets and invoices, in July and August 2002, the VA authorized the electronic transfer of a total of $32,100 to a bank account jointly owned by Ratliff-White, Norwood, and Norwood‘s daughter. Because several events caused Rio to question CHHS‘s legitimacy, the VA terminated its contract with CHHS in August 2002. That October, the Office of the Inspector General for the VA searched Ratliff-White‘s apartment in Aurora, Illinois and found CHHS‘s bogus time sheets, invoices, and tax-related information.
For their activities, Ratliff-White and Norwood were ultimately indicted for committing mail fraud in violation of
To prove that the transmission of payment instructions had in fact occurred on the dates charged, the government called Alice Merculief, a United States Treasury representative, who explained the standard procedure for electronically depositing funds into the accounts of VA vendors like CHHS. According to Merculief, the VA‘s processing center in Austin, Texas (“VA Austin“) first submitted payment files to the Treasury‘s mainframe computer in Hyattsville, Maryland (“Treasury Hyattsville“) where the payment files were validated. Next, Treasury Hyattsville sent a “pre-edit” report to the Treasury‘s remоte financial center in Austin, Texas (“Treasury Austin“), which certified the payment. Then, Treasury Austin formatted the payment request and transmitted it from the Treasury‘s mainframe at Treasury Hyattsville to the Federal Reserve Bank in Dallas, Texas (“Federal Reserve Dallas“). Finally, Federal Reserve Dallas ensured the deposit of funds into the appropriate vendor account.
Merculief also authenticated records from the Treasury‘s database reflecting that, on behalf of the VA, the Treasury had paid CHHS $22,470 on July 16, 2002, and $9,150 on August 15, 2002. Merculief testified that instructions regarding each payment would have been transmitted
Riо testified that the standard procedure was not followed in making the July 16, 2002 payment at issue in Count One. He said that because Norwood represented that she needed to pay CHHS employees right away, “[w]e worked it out what we called paid out of off line, which allowed us to deal with our Finance Department to pay and actually send an electronic payment, which is received within three days, to that particular vendor and that was done . . . .” Rio acknowledged on cross-examination that Hines VA‘s fiscal department “did not use the usual procedure of notifying the VA‘s payment center in Austin and having them send the funds.” He could not describe the “off line” process in detail, and did not know how Hines VA‘s fiscal department was able to override the traditional three to four week payment process becausе it was “not [his] department.” Merculief testified that she was not at all familiar with the “off line” process.
The jury also heard testimony that Ratliff-White believes portrayed her as a liar. First, during his testimony, Rio mentioned that Ratliff-White had made prior requests for services from the VA, including a request that the VA pay for her to fly to Arlington, Virginia to attend the alleged funeral of her fiance. Rio explained that the VA denied that request, finding that there was no one in the military by the name Ratliff-White gave and that no such individual had died or been buried in Arlington. Ratliff-White did not object to this testimony. In addition, the government cross-examined Ratliff-White‘s treating physician, Dr. Judi A. McInerney, in a manner suggesting that Ratliff-White had fabricated her assault history. The defense objected, saying that the questions as-
The jury convicted Ratliff-White on both counts, and the court sentenced her to concurrent terms of 21 months’ incarceration and three years’ supervised release. In addition, she was ordered to make restitution in the amount of $32,100 to VA Hines, an obligation for which she and Norwood were held jointly and severally liable, and to pay a $100 special assessment on each count. Ratliff-White now appeals her convictions.
II. ANALYSIS
A. Ratliff-White‘s Sufficiency of the Evidence Challenges
Ratliff-White contends that the resolution of this appeal primarily turns on two questions: (1) whether there is sufficient evidence to support a finding that payment instructions flowed from the Treasury in Hyattsville, Maryland to the Federal Reserve Bank in Dallas, Texas on the dates charged; and (2) whether those transmissions were reasonably foreseeable. If not, she contends, both of her convictions must be vacated.
Defendаnts shoulder a heavy burden when lodging sufficiency of the evidence challenges. To prevail, Ratliff-White must show that when viewing all the evidence in the light most favorable to the government, no rational trier of fact could have found her guilty of the charges beyond a reasonable doubt. United States v. Olson, 450 F.3d 655, 664 (7th Cir. 2006).
A defendant commits wire fraud under
1. Sufficiency of the Evidence on Count Two
We start with simplest issue, Ratliff-White‘s challenge to the sufficiency of the evidence offered to prove the charges alleged in Count Two.
Evidence that wire transmissions occur in the usual course of business is ordinarily sufficient to show that a particular wire transmission occurred on a given occasion. See, e.g., Alexander, 135 F.3d at 474-75. However, if the defendant counters with evidence that the party deviated from its usual practice, the government can no longer rely on standard procedure evidence to prove that a particular wire transmission occurred. See, e.g., United States v. Swinson, 993 F.2d 1299, 1300-02 (7th Cir. 1993).
Here, the government maintains that Alice Merculief‘s testimony describing the Treasury‘s standard procedure for processing payments on behalf of the VA proves that instructions for the payment of $9,150 to CHHS flowed from the Treasury in Hyattsville, Maryland to the Federal Reserve Bank in Dallas, Texas on August 15, 2002. We agree. Because there was no evidence of deviation from standard practice as to the August payment, the government‘s reliance on Merculief‘s testimony was proper.
b. Proof that Ratliff-White Knowingly Caused a Wire Transmission
A defendant “knowingly causes” another to make a wire transmission if the defendant knows that a wire transmission will occur in the ordinary course of business or where the use of wires could be reasonably foreseen. See Am. Auto. Accessories, Inc., 175 F.3d at 542; Alexander, 135 F.3d at 475. Ratliff-White contends that the government failed to prove that the transmission of payment instructions from Hyattsville to Dallas—an admittedly obscure internal procedure—was fоreseeable. Her argument misses the mark, however, because she overstates the government‘s burden.
2. Sufficiency of the Evidence on Count One
We turn now to the more difficult question of whether the government offered evidence sufficient to prove the charges alleged in Count One.
a. Proof of a Wire Transmission
As we stated above, evidence that wire transmissions occur in the usual course of business will not show sufficiently that a particular wire transmission occurred when the evidence suggests a deviation from usual practice. See, e.g., Swinson, 993 F.2d at 1300-02. Just such a deviation occurred on July 16, 2002, when, at CHHS‘s request for quick payment, the VA transferred funds to Ratliff-
Ratliff-White contends that this flaw is fatal to the government‘s case on Count One, and compels the automatic reversal of the guilty verdict on that count. We do not agree. The defendant‘s position ignores the foundational question of prejudice. The defendant does not deny that there was a fraud. She admits that wire transmissions—transmissions that furthered the scheme—occurred on the dates charged, stating “[t]here is no dispute that payments were wired from the Federal Reserve Bank in Dallas, Texas to the defendants’ bank account. But, for whatever reason, that is not the interstate wire transmission with which Ms. Ratliff-White was charged.” Defendant‘s Reply Br. at 13. And, she unquestiоnably foresaw (i.e., caused) those wire transmissions, because she, Norwood, and Norwood‘s daughter established a bank account where they wanted the VA to deposit CHHS‘s payments. The proof at trial established a glaring violation of the federal wire fraud statute.
Instead of disclaiming participation in a wire fraud, then, the defendant resorts to arguing that the government failed to prove the precise step in the July payment process alleged in Count One. Specifically, we understand the defendant to be contending that she was prejudiced by either a constructive amendment to the indictment or a variance between the indictment and proof at trial. Constructive amendments and variances can imperil a defendant‘s Fifth Amendment right to be informed of the nature and cause of the accusatiоn against
A variance between indictment and proof exists “when the terms of the indictment are unaltered, but the evidence offered at trial proves facts materially different from those alleged in the indictment.” United States v. Galiffa, 734 F.2d 306, 312 (7th Cir. 1984) (citation omitted); see United States v. Willoughby, 27 F.3d 263, 265 (7th Cir. 1994); Hunter v. New Mexico, 916 F.2d 595, 598-99 (10th Cir. 1990). “[A] variance is fatal only when the defendant is prejudiced in his defense because he cannot anticipate from the indictment what evidence will be presented against him or is exposed to the risk of double jeopardy.” Hunter, 916 F.2d at 599; United States v. Kuna, 760 F.2d at 819.
A constructive amendment to an indictment:
is found where a “complex set of facts” is presented to the jury during the trial which is distinctly different from the set of facts set forth in the charging instrument. Alternatively, to find a constructive amendment the crime charged in the indictment must be “materially different or substantially altered at trial, [so that] it is impossible to know whether the grand jury would have indicted for the crime actually proved.”
The line distinguishing variances from constructive amendments “essentially is between the situation in which different evidence supports the charged crime [as with a variance] and that in which the evidence supports a crime other than that charged [as with an amendment].” United States v. Pisello, 877 F.2d 762, 765 (9th Cir. 1989); see United States v. Patterson, 348 F.3d 218, 227 (7th Cir. 2003); Willoughby, 27 F.3d at 265-66. While there exists only a “‘rather shadowy distinction’ between amendments and variances, a finding of one rather than the other achieves a crystal clear difference in result: ‘amendments have been held to be prejudicial per se, while variances may be subject to the harmless error rule.’ ” Kuna, 760 F.2d at 817 (citations omitted); Pisello, 877 F.2d at 765 (“Although . . . an amendment[ ] requires reversal, . . . a variance[ ] does not warrant reversal unless it affects the substantial rights of the defendant.“).
We turn now to that distinction for guidance, looking first at case law on constructive amendments and then at the law оf variances. In Stirone v. United States, the Supreme Court found a constructive amendment where the indictment charged the defendant only with interfering with the importation of sand, yet the trial evidence also went to prove a qualitatively different violation of the Hobbs Act—the interference with the possible exportation of steel. 361 U.S. at 217. Noting that “after an indictment has been returned its charges may not be broadened through amendment except by the grand jury itself,” id. at 215-16, and that “a court cannot permit a defendant to be tried on charges that are not made in the indictment against him,” id. at 217, the Court reversed the defendant‘s conviction, id. 219. There was simply no way of knowing whether a grand jury “satisfied to charge that
By contrast, when confronted with a case resеmbling this one, the Second Circuit in United States v. Dupre, 462 F.3d 131 (2d Cir. 2006), found a variance, not a constructive amendment of the indictment, and affirmed the defendants’ convictions for wire fraud and conspiracy to commit wire fraud. Id. at 140-41. There, the defendants engaged in an advance fee fraud, whereby they told investors that they were working to release frozen funds owed to the family of former Filipino president Ferdinand Marcos. Id. at 135. Investors were promised that in exchange for their $1,000 contributions to the effort to release the funds, they would ultimately receive $500,000. Id.
Although the indictment charged that the defendants “caused an investor to wire approximately $2,000 via Western Union from Liberty Township, Ohio to New York, New York,” and that fact was not proved at trial, the court nonetheless affirmed the defendants’ convictions based on proof unequivocally establishing that other interstate transmissions occurred in furtherance of the scheme. Id. at 140 n.10 (emphasis omitted). The court reasoned that:
the prosecution did not constructively amend Count Two because the evidence at trial concerned the same elaborate scheme to defraud investors as was described in the indictment. The starting and ending dates of the conspiracy noted in the indictment correspond to the conspiracy proven at trial, and the evidence at trial demonstrated that defendants misled investors into believing that defendants would eventually be able to obtain the “frozen funds purportedly belonging to the family
of former Filipino president Ferdinand Marcos” described in the indictment. There was, however, clearly a variance because the particular wire transfer identified in the indictment was not proven at trial.
Id. at 140-41; see also United States v. Momeni, 991 F.2d 493, 495 (9th Cir. 1993); Pisello, 877 F.2d at 765; United States v. Von Stoll, 726 F.2d 584, 586 (9th Cir. 1984).
So too here. In this case, the superseding indictment charged that Ratliff-White “knowingly devised, intended to devise, and participated in a scheme to defraud and obtain money from the United States of America, through the Department of Veterans Affairs, by means of materially false and fraudulent pretenses . . . .” In particular, the indictment alleged that from
in or about July 2002 to August 2002, defendant RATLIFF-WHITE and defendant NORWOOD caused the VA to deposit approximately $32,100 in funds representing payment for services purportedly performed by Compassionate Home Health Services into the account that they jointly owned at TCF National Bank, well knowing that Compassionate Home Health Services was a fictitious company and had not provided any such services.
The proof at trial established exactly that. Therefore, we conclude, just as the Secоnd Circuit did in Dupre, that “the prosecution did not constructively amend [the indictment] because the evidence at trial concerned the same elaborate scheme to defraud [the United States] as was described in the indictment.” Dupre, 462 F.3d at 140-41. Further, the starting and ending dates of the scheme noted in the indictment and proved at trial are identical. See id. And the evidence adduced at trial showed that, as described in the indictment, the defendant “caused the VA to deposit approximately $32,100 in funds representing
Moreover, this case presents facts even more compelling than thosе of Dupre. In Dupre, the court recognized that the wire transmission actually proved at trial was “not mentioned in the indictment at all.” Dupre, 462 F.3d at 142. But here, the indictment expressly references the wire transmissions proved at trial—deposits totaling $32,100 into the account Ratliff-White shared with Norwood and her daughter. We need not wonder “whether the grand jury would have indicted for the crime actually proved,” Kuna, 760 F.2d at 818, because it did. And importantly, unlike Dupre, this case concerns only one true transfer that involved a particular payer (the VA) and payee (CHHS). Although the indictment anticipated that the transfer would require multiple steps and highlighted one of those steps, the overarching transfer discussed in the indictment was proved at trial. In Dupre, however, the transfer charged in the indictment and that proved at trial were completely different as they involved entirely different payers. Finding no constructive amendment of the indictment, we consider whether the facts suggest a fatal variance.
These facts evince a variance between Count One, which pinpointed a particular step in the payment process, and the proof at trial, which established another. But, every instance in which we find a variance between indictment and proof does not require reversal. Indeed, “[a] variance between allegation and proof is not fatal unless the defendant has been thereby deprived of an adequate opportunity to prepare a defense or has been exposed to a risk of being prosecuted twice for the same offense.” Kuna, 760 F.2d at 819 (citations omitted).
The court concluded that the defendants were not prejudiced by this variance. First, the court found that the defendants had notice sufficient to defend themselves: “The description of the scheme in the indictment put defendants on notice that the prosecution aimed to prove that defendants conspirеd in the Southern District of New York to fraudulently induce investors to transfer money by wire to defendants between October 2002 and February 2004.” Id. at 141. Further, the court reasoned, the defendants could not have been surprised by the evidence used to prove the transfer from Irving, Texas to New York City because, among other things, Federal Rule of Criminal Procedure 16 requires the disclosure of exhibits and witnesses prior to trial. Id. The defense also knew that a particular individual would be testifying, and that she possessed certain incriminating documents. Id. For those reasons, the court found the defense had every reason to, and did, vigorously cross-examine the witness. Id. at 141-42. And, “[n]othing in the record suggest[ed] that the defense would have prepared any differently had the indictment specified a transfer via Western Union of $2,000 from Irving, Texas, instead of a transfer
Finally, the Second Circuit acknowledged that since the only wire transmission alleged in the indictment was not proved at trial and “[b]ecause neither the prosecution‘s summation nor the District Court‘s charge to the jury mentioned what specific transfer was relied upon, [that] neither [the court] nor the defendants [could] know what single act substituted for that enumerated in the indictment.” Id. at 142. Nonetheless, the court found no prejudice because the district court properly “instructed the jury that it could find defendants guilty of Count Two only if it found them responsible for a fraudulent interstate wire transfer.” Id. at 142-43; see United States v. Davis, 471 F.3d 783, 791 (7th Cir. 2006) (“All that remains is the defendant‘s argument that the indictment, coupled with inadequate jury instructions, allowed him to be convicted by less than a unanimous jury. . . . Taken in context, the jury was adequately informed of the need for unanimity and that all elements—and at least one schemе—be proved beyond a reasonable doubt. The jury instructions and the inclusion of multiple schemes in a single count did not deprive the defendant of a unanimous jury.“); see also Griffin v. United States, 502 U.S. 46, 56-57 (1991) (“When a jury returns a guilty verdict on an indictment charging several acts in the conjunctive, . . . the verdict stands if the evidence is sufficient with respect to any one of the acts charged.” (quoting Turner v. United States, 396 U.S. 398, 420 (1970)); United States v. Jones, 418 F.3d 726, 729-30 (7th Cir. 2005); United States v. Bond, 231 F.3d 1075, 1078 (7th Cir. 2000); United States v. Durman, 30 F.3d 803, 810 (7th Cir. 1994).
Here, as in Dupre, we find that the variance between the indictment and proof at trial was harmless, because the defendant was not deprived of an adequate opportunity to
Further, the jury instructions alleviate concern that the jury convicted on less than a unanimous verdict.
Finally, affirming Ratliff-White‘s conviction on Count One does not give rise to a possible double jeopardy claim. The indictment alleged a specific fraud—one that: (1) occurred during a finite interval, “from in or about July 2002 to August 2002“; (2) involved a particular perpetrator and victim, Ratliff-White and the VA, respectively; and (3) alleged specific misconduct by the perpetrator, “caus[ing] the VA to deposit approximately $32,100 in funds representing payment for services purportedly performed by Compassionate Home Health Services into the account . . . at TCF National Bank, well knowing that Compassionate Homе Health Services was a fictitious company and had not provided any such services.” The indictment also specified the particular wire transmissions at issue—the deposit of a total of $32,100 into Ratliff-White‘s account, and the transmission of payment instructions from Hyattsville, Maryland to Dallas, Texas on July 16, 2002 and August 15, 2002. We perceive no difficulty in judging the scope of the conviction for double jeopardy purposes. See Dupre, 462 F.3d at 143 n.12. For all the above reasons, we find that any variance between the language of Count One and the proof at trial was harmless.5
Having concluded that there was sufficient evidence to show that a wire transmission charged in Count One in fact occurred, the final question is whether Ratliff-White foresaw any wire transmission associated with the fraud alleged in Count One. For the same reasons we found that the government satisfied its burden of proving that Ratliff-White foresaw the use of the wires in furtherance of the wire fraud alleged in Count Two, we find that she foresaw a wire transmission in connection with the charges in Count One.
On appeal, for the first time, Ratliff-White argues that her convictions are the result of the prosecution‘s introduction of improper propensity evidence in violation of
Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence оf mistake or accident, provided that upon request by the accused, the prosecution in a criminal case shall provide reasonable notice in advance of trial, or during trial if the court excuses pretrial notice on good cause shown, of the general nature of any such evidence it intends to introduce at trial.
Whether the district cоurt erred in allowing this questioning is immaterial because any error was harmless. See
This case is distinguishable from Meeker in several important respects. The defendant does not suggest that there was no factual basis for the questions asked of Dr. McInerney or that any of the questions suggested facts that were patently untrue. Rio‘s testimony reveals that there was а factual basis for the questions posed to him. Also, in this instance, the prosecution‘s alleged misconduct was not repeated. The prosecution did not ignore any warning regarding its questioning of Dr. McInerney, and the defendant only objected to one of the questions asked of Dr. McInerney. After the court sustained that objection, the government refrained from asking objectionable questions. Neither the defendant nor the court expressed any concern regarding the questions posed to Rio. Finally, with respect to Dr. McInerney, it seems clear that the defense put Ratliff-White‘s assault history in issue by asking Dr. McInerney questions regarding Ratliff-White‘s accounts of abuse, which opened the door for the government to ask questions about that assault history. Therefore, the defendant‘s reliance on United States v. Meeker is not persuasive.
For these reasons, Ratliff-White‘s сonvictions are AFFIRMED.
A true Copy:
Teste:
Clerk of the United States Court of Appeals for the Seventh Circuit
USCA-02-C-0072—7-10-07
Notes
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, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, 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.
Additionally, we note that this case is distinguishable from United States v. Swinson, 993 F.2d 1299 (7th Cir. 1993), in which we reversed a defendant‘s conviction for mail fraud even though the evidence showed “that [a] requisition and invoice were mailed” in furtherance of the alleged scheme. Id. at 1303. There, we reversed for the simple reason that the indictment “only concerned itself with the purchase order.” Id. at 1303 (emphasis added). Indeed, in that case, the indictment did not even reference a requisition or invoice. To have affirmed the conviction because there was sufficient еvidence that two documents not even hinted at in the indictment were mailed would have deprived the defendant of his constitutional right to notice of the charges against which he must defend. Our facts do not present such a notice problem. See United States v. Lovett, 811 F.2d 979, 986 (7th Cir. 1987) (“Convictions generally have been sustained as long as the proof upon which they are based corresponds to an offense that was clearly set out in the indictment.” (citations omitted)).