UNITED STATES OF AMERICA, Plaintiff-Appellee, v. MICHAEL W. TRAMMELL, Defendant-Appellant.
No. 97-3045
UNITED STATES COURT OF APPEALS TENTH CIRCUIT
JAN 12 1998
PUBLISH. Appeal from United States District Court for the District of Kansas (D.C. No. 96-CR-10010).
Before TACHA, McKAY, and BRISCOE, Circuit Judges. BRISCOE, Circuit Judge.
UNITED STATES COURT OF APPEALS
Tenth Circuit
Byron White United States Courthouse
1823 Stout Street
Denver, Colorado 80294
(303) 844-3157
Patrick J. Fisher, Jr. Elisabeth A. Shumaker
Clerk Chief Deputy Clerk
January 23,
TO: ALL RECIPIENTS OF THE CAPTIONED OPINION
RE: 97-3045, United States v. Trammell
January 12, 1998
Please be advised of the following correction to the opinion:
On page 5, in the first sentence of the last paragraph that begins “On January 18, 1996, Trammell was indicted . . .” there is a typographical error. The name of the former Assistant United States Attorney referenced in the sentence should not read “Robert Schodorf.” The correct name is “Richard Schodorf.”
Please make the appropriate correction to your copy of the opinion.
Very
Patrick Fisher, Clerk
Keith Nelson
Deputy Clerk
UNITED STATES OF AMERICA, Plaintiff-Appellee, v. MICHAEL W. TRAMMELL, Defendant-Appellant.
No. 97-3045
UNITED STATES COURT OF APPEALS TENTH CIRCUIT
JAN 12 1998
Michael W. Trammell appeals his convictions for two counts of mail fraud, in violation of
I.
This case involves Trammell‘s misappropriation of investors’ funds. Trammell, a licensed
On December 14, 1990, Leslie Oberhelman gave Trammell three checks payable to Senior Insurance Strategies, totaling $200,000, for American Investors annuities. Trammell forwarded Oberhelman‘s completed annuity applications to American Investors, but did not include the associated $200,000 premium. American Investors wrote to Trammell on three occasions asking him to forward the funds so that the annuity applications could be processed. Finally, on January 30, 1991, American Investors wrote a letter to Oberhelman‘s daughter, the proposed annuitant, informing her premiums had not been received and the company was closing its file.
On March 19, 1991, after his termination from American Investors, Trammell sent two annuity applications for Oberhelman to Financial Benefit. On March 29, Larry Sawyer, an employee of Senior Insurance Strategies, sent two applications to Oberhelman‘s daughter for her signature. Sawyer told Oberhelman that $150,000 of Oberhelman‘s money was being used to purchase annuities from Financial Benefit, when in fact, as the government‘s financial analyst demonstrated at trial, Trammell had spent all of Oberhelman‘s money by February 5, 1991. Trammell eventually purchased a $100,000 annuity for Oberhelman from Financial Benefit by wiring money from another investor‘s account. American Investors later settled a civil lawsuit with Oberhelman for $100,000.
On February 15, 1991, Carl and Dixie McWhorter gave Trammell a check for $17,325, and on April 8, 1991, they gave him an additional check for $32,514.50. Trammell told the McWhorters to make the checks payable to Senior Insurance Strategies. These checks were to be used to purchase a $60,000 annuity. Sawyer wrote to the McWhorters’ daughter on April 9, 1991, asking for additional information and that she sign the annuity application. Trammell forwarded the completed application to Financial Benefit, but sent no money. In fact, as the government‘s financial analyst demonstrated at trial, Trammell had spent nearly all of the funds from the first check by February 28, 1991, and nearly all of the funds from the second check by May 1, 1991. The McWhorters never received an annuity and settled a civil lawsuit with Financial Benefit for $30,000.
Marcella Storey gave Trammell a check for $139,661.42 on June 3, 1991, to purchase an annuity from Financial Benefit. Trammell deposited the check in a Lawrence, Kansas, bank and, on June 7, 1991, he wired $100,000 of the funds to Financial Benefit for Oberhelman‘s annuity. Trammell forwarded an application for a $118,918.84 annuity to Financial Benefit for Storey, but did not send the required premium. The government‘s financial analyst demonstrated at trial that Trammell had spent all of Storey‘s money by June 17, 1991. In July, Storey received a $22,500 annuity issued by Presidential Life Insurance Company. Storey filed a civil lawsuit against Trammell, Senior Insurance Strategies, and Financial Benefit and settled with Financial Benefit for $58,000.
Trammell was indicted in Kansas state court on December 6, 1991, for three counts of failing to pay insurance premiums by an insurance agent, in violation of
On January 18, 1996, Trammell was indicted in federal court and Richard Schodorf, then an Assistant United States Attorney, represented the government. Trammell was convicted of two counts of mail fraud, one count of wire fraud, and two counts of money laundering. He was sentenced to forty-one months’ imprisonment and three years’ supervised release. In addition, he was ordered to pay $282,661.42 in restitution.
II.
Trammell argues his convictions should be reversed because (1) his federal prosecution violated the Double Jeopardy Clause; (2) his due process rights were violated by preindictment delay; (3) there was insufficient evidence to sustain his convictions for mail fraud and wire fraud; (4) there was insufficient evidence to establish federal jurisdiction over the money laundering charges; and (5) the district court failed to use a special verdict form. In addition, Trammell argues his sentence should not have been enhanced pursuant to
Double Jeopardy
Trammell contends his federal prosecution was barred by the Double Jeopardy Clause because he was previously prosecuted and acquitted in state court. A defendant bears the burden of proving double jeopardy. United States v. Rodriguez-Aguirre, 73 F.3d 1023, 1025 (10th Cir. 1996). This court reviews a district court‘s factual findings underlying a double jeopardy claim for clear error. Id. at 1024-25. However, we review de novo the court‘s legal determination regarding double jeopardy. Id. at 1025.
The Double Jeopardy Clause of the
Despite the general dual sovereignty rule, there is a limited exception commonly referred to as the “sham prosecution” exception. See Bartkus v. Illinois, 359 U.S. 121, 123-24 (1959). In Bartkus, the court rejected a double jeopardy claim, noting:
[The record did] not support the claim that the State of Illinois in bringing its prosecution was merely a tool of the federal authorities, who thereby avoided the prohibition of the Fifth Amendment against a retrial of a federal prosecution after an acquittal. [The record also] does not sustain a conclusion that the state prosecution was a sham and a cover for a federal prosecution, and thereby in essential fact another federal prosecution.
Id. The implication from this statement is that when one sovereign is acting as “merely a tool” of the other, and the second prosecution is merely a “sham and cover” for a previously unsuccessful prosecution, the second prosecution violates the Double Jeopardy Clause. Although frequently noted, this exception is “an extremely narrow one” and is rarely applied. United States v. Paiz, 905 F.2d 1014, 1024 (7th Cir. 1990); see also United States v. Rector, 111 F.3d 503, 507 (7th Cir. 1997) (noting the exception “has been discussed by courts in the process of rejecting its application ever since [it was created]“); Guzman, 85 F.3d at 827 (“[Bartkus exception] limited to situations in which one sovereign so thoroughly dominates or manipulates the prosecutorial machinery of another that the latter retains little or no volition in its own proceedings“).
The “sham prosecution” exception has been discussed by this court but has never been applied to grant a defendant relief. See Raymer, 941 F.2d at 1036-38. In fact, since its articulation in 1959, the exception has been applied in only one reported federal case, see United States v. Belcher, 762 F.Supp. 666, 670-71 (W.D. Va. 1991), which has led some courts to question its continued validity. See Raymer, 941 F.2d at 1037 (“possible exception to the dual sovereignty rule might exist“); Paiz, 905 F.2d at 1024 (doubting existence of “very narrow” exception and explaining court has “uniformly rejected” its use).
A defendant attempting to persuade a court to apply the “sham prosecution” exception faces the “substantial burden of proving one sovereign is so dominated by the actions of the other that the former is not acting of its own volition.” Raymer, 941 F.2d at 1037. This burden is not satisfied by merely showing the state has conducted the majority of the investigation relied upon by the government in federal prosecution of the defendant. See United States v. Bernhardt, 831 F.2d 181, 183 (9th Cir. 1987) (“[S]ufficient independent federal involvement . . . save[s] the prosecutions from th[e] exception.“); see also United States v. Johnson, 973 F. Supp. 1102, 1108 (D. Neb. 1997) (“It is perfectly permissible for federal authorities to prosecute cases investigated almost exclusively by state officers.“). It is also irrelevant that a state prosecutor, after unsuccessfully prosecuting a defendant, encourages or requests federal authorities to prosecute the defendant. See United States v. Tirrell, 120 F.3d 670, 677 (7th Cir. 1997) (“state merely requested the United States to prosecute Mr. Tirrell a second time“). Moreover, a defendant is not entitled to application of the exception simply because the same attorney represented both the state and the United States in the two prosecutions against the defendant. See Raymer, 941 F.2d at 1038; United States v. Padilla, 589 F.2d 481, 484-85 (10th Cir. 1978); see also United States v. Pena, 910 F. Supp. 535, 540 (D. Kan. 1995) (“Every circuit to date that has considered this issue has held that the cross-designation of a state district attorney as a federal attorney to assist or even to conduct a federal prosecution does not by itself bring the case within the Bartkus exception.“). At least one court has held this to be true even when the state prosecutor later served as a specially appointed Assistant United States Attorney for the express purpose of prosecuting defendant a second time and was compensated by the state to prosecute defendant in federal court. See Bernhardt, 831 F.2d at 183.
Trammell has not satisfied his substantial burden to fall within the very limited “sham prosecution” exception. At most, Trammell has demonstrated Schodorf, the Assistant United States Attorney who prosecuted his federal case, also supervised the attorney who prosecuted his state case. However, Schodorf testified he was not directly involved in the state prosecution and was not even familiar with the state prosecution until after Trammell was acquitted. Specifically, he stated the state prosecution of Trammel “was [Kisner‘s] case and I paid no attention to it.” R. Suppl. I at 56. Moreover, he submitted an affidavit explaining the only reason he prosecuted the federal case was that it was reassigned to him after another Assistant United States Attorney resigned. Based on this testimony, the court found “Schodorf acted as the nominal supervisor of the attorney who brought the previous state criminal charges, but that he was not significantly involved in either the decision to bring those charges or the handling of the case.” R. I, doc. 39 at 4. This finding is not clearly erroneous. Schodorf‘s tangential involvement does not demonstrate the federal government was so dominated by the actions of the state that the federal government was “not acting of its own volition.” See Raymer, 941 F.2d at 1038. Contrary to Trammell‘s characterization, the government has established it conducted substantial independent investigation into Trammell‘s activities.
Finally, Trammell makes much of the fact that the witnesses and evidence used in the state prosecution were the same witnesses and evidence used in the federal prosecution. Even if this is true, it simply does not demonstrate the federal prosecution was a sham. The witnesses and exhibits that are key to the prosecution will not change merely because the prosecution moves from state to federal court. Further, numerous individuals who were not included on the state witness list testified during the federal trial.
Trammell has clearly not sustained his heavy burden of proving the government was so dominated by the actions of the state that it was “not acting of its own volition.” Trammell‘s federal prosecution did not violate the Double Jeopardy Clause.
Due Process
Trammell contends his due process rights were violated by the government‘s three year and nine month delay in indicting him after he was acquitted in state court. Whether Trammell‘s due process rights were denied by a delay in bringing an indictment is a question of fact, which this court reviews for clear error. See United States v. Engstrom, 965 F.2d 836, 838 (10th Cir. 1992).
“[T]he Due Process Clause has a limited role to play in protecting against oppressive [pre-indictment] delay.” United States v. Lovasco, 431 U.S. 783, 789 (1977). “Preindictment delay is not a violation of the Due Process Clause unless the defendant shows both that the delay caused actual prejudice and that the government delayed purposefully in order to gain a tactical advantage.” United States v. Johnson, 120 F.3d 1107, 1110 (10th Cir. 1997). Vague and conclusory allegations of prejudice resulting from the passage of time and the absence of witnesses are insufficient to constitute a showing of actual prejudice. Defendant must show definite and not speculative prejudice, and in what specific manner missing witnesses would have aided the defense. United States v. Jenkins, 701 F.2d 850, 855 (10th Cir. 1983).
Trammell argues the government‘s delay prejudiced his case because two of his victims died before testifying at his federal trial and because he testified during an intervening civil suit without exercising his rights under the
Trammell has completely failed to establish the government‘s failure to indict him sooner was an intentional ploy to gain a tactical advantage. Schodorf testified the delay was because of a backlog of cases and a shortage of attorneys in his office. He testified that cases are often filed near the end of the applicable statute of limitations period. Schodorf testified the government‘s own presentation in the case suffered from the death of the witnesses. In denying Trammell‘s motion to dismiss, the district court explained the inability to call the two victims as witnesses would not be a significant disadvantage to Trammell, and there was “no indication that the delay was undertaken with the purpose of working injury to the ability of Trammell to defend the action.” R. I, doc. 39 at 3. This finding is not clearly erroneous.
Sufficiency of Evidence to Support Mail and Wire Fraud Convictions
Trammell contends the evidence was not sufficient to support his convictions for mail and wire fraud. Specifically, he argues (1) the government presented no evidence that he devised or intended to devise a scheme to defraud; (2) there was no proof he used the mails or caused the mails to be used; and (3) the government failed to prove the mailings were in execution of the fraudulent scheme.
In reviewing a challenge to sufficiency of the evidence, we must determine whether “any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. In answering this question, we may neither weigh conflicting evidence
Scheme to defraud
To prove mail fraud under
The jury was instructed that a “scheme to defraud” means “any deliberate plan of action or course of conduct by which someone intends to deceive or cheat another or by which someone intends to deprive another of something of value.” R. I, doc. 62, instr. 15. Under this definition, it is clear the government presented sufficient evidence for the jury to conclude Trammell created a “scheme to defraud.” See, e.g., Reddeck, 22 F.3d at 1506-08 (sufficient evidence of defendant‘s scheme to defraud despite claim actions were result of delusional disorder).
Trammell signed brokerage agreements with American Investors and Financial Benefit that required him to collect premiums from investors made payable only to the companies. Unfortunately, apparently to obtain personal access to investors’ funds, Trammell instructed investors to make their checks payable to Senior Insurance Strategies instead of to the companies. Sawyer testified that Trammell instructed him to have investors make their checks payable to Senior Insurance Strategies. All of the investors involved here made their checks payable to Senior Insurance Strategies, and the government presented an extensive analysis of how Trammell systematically spent the investors’ money for unrelated business and personal expenses. With the exception of one annuity purchased for Oberhelman, none of the money given to Trammell by the investors was used to purchase annuities. A jury could easily conclude Trammell created a deliberate plan of action or course of conduct to deceive or cheat another or deprive another of something of value.
Use of mails
The record also reflects the government presented ample evidence that Trammell caused the mails to be used in the execution of his scheme to defraud. Oberhelman‘s daughter testified she received a letter from Trammell and she sent a letter back to Trammell through the postal system. The McWhorters’ daughter testified that she received a letter from Trammell through the mail. Sawyer testified that he “sent” both letters at the direction of Trammell. A jury could easily conclude Trammell caused the mails to be used.
Trammell argues the letters sent to Oberhelman‘s daughter and the McWhorters’ daughter did not further his alleged scheme because he had already obtained money from Oberhelman and the McWhorters when the letters were sent. The letters in question requested the recipient to complete the enclosed form, sign the form, and return it to Senior Insurance Strategies. “In a mail fraud case it is not necessary that the mailing predate the defendant‘s receipt of the money.” United States v. Kelley, 929 F.2d 582, 585 (10th Cir. 1991). Mailings sent after the defendant has obtained the victim‘s money are considered “in furtherance of the scheme” for purposes of
The letters here were obviously designed to lull Oberhelman and the McWhorters into believing Trammell was working with the insurance companies to procure annuities for them, when in fact at the time the letters were written he had already spent all of the money they had entrusted to him. Sawyer testified that Trammell told him to tell the McWhorters “the delay was caused by the paperwork not all being completed for the annuity application.” R. III at 110. Moreover, both letters were sent before Trammell obtained any money from Storey. Trammell surrendered his insurance license on June 13, 1991. If he had not placated Oberhelman and the McWhorters throughout the spring of 1991 by continuing the impression he was working to obtain their annuities, they would have likely reported their frustrations to the insurance commission sooner. This might have prevented Storey‘s loss. A jury could easily conclude that by sending the letters, Trammell furthered his fraudulent scheme.
Sufficiency of Evidence to Establish Federal Jurisdiction over Money Laundering Charges
Trammell contends his money laundering conviction should be reversed because the government failed to establish his activities affected interstate commerce. The requirement that a transaction be “in or affecting interstate commerce” is both jurisdictional and an essential element of the charge of money laundering under
The record reveals Trammell accepted checks from financial institutions insured by the FDIC in the course of his fraudulent scheme. The record also shows he wired money from his account in a Lawrence, Kansas, bank to a bank in Ft. Lauderdale, Florida, on June 5, 1991. Therefore, Trammell‘s transactions sufficiently affected interstate commerce to confer the federal court with jurisdiction over the money laundering charges. Moreover, the record establishes the government proved Trammell‘s actions had at least a minimal effect on interstate commerce. The jury was presented with the evidence discussed above and was instructed on the government‘s burden to establish Trammell‘s transactions affected interstate commerce. The jury‘s verdict indicates it found Trammell‘s conduct affected interstate commerce, and there is sufficient evidence in the record to support the jury‘s conclusion.
Special Verdict Form
Trammell contends his conviction should be reversed because the district court failed to use a special verdict form so the jury could identify which of the two forms of fraud identified in
We review de novo the question of whether an indictment is duplicitous. United States v. Wiles, 102 F.3d 1043, 1061 (10th Cir. 1996). A duplicitous indictment charges the defendant with two or more separate offenses in the same count. United States v. Haddock, 956 F.2d 1534, 1546 (10th Cir. 1992). Here, Trammell is asserting each of the mail and wire fraud counts charged him with two crimes, one based upon a scheme to defraud and another based upon a scheme to obtain money by false pretenses. “The dangers of duplicity are three-fold: (1) A jury may convict a defendant without unanimously agreeing on the same offense; (2) A defendant may be prejudiced in a subsequent double jeopardy defense; and (3) A court may have difficulty determining the admissibility of evidence.” Wiles, 102 F.3d at 1061.1
Trammell‘s duplicity argument rests on the holding in United States v. Cronic, 900 F.2d 1511, 1513 (10th Cir. 1990), that “[a]lthough largely overlapping, a scheme to defraud, and a scheme to obtain money by means of false or fraudulent pretenses, representations, or promises, are separate offenses.” Id. at 1513 (emphasis added). Relying on this statement, Trammell argues that under principles of duplicity, the government is required to charge a defendant with the two types of mail fraud in
The record does not reflect exactly when Trammell first advanced his argument that the jury should be instructed that the two types of mail fraud were two separate offenses. During the jury instruction hearing, Trammell‘s counsel stated: “I want to make sure on the record that the Court [is] aware from our previous discussions of our suggestion that perhaps the Cronic case and the Migliaccio case that I cited, because these are two separate and distinct offenses, that there is this duplicity problem.” R. IX at 366 (emphasis added). It is not clear when Trammell‘s counsel and the court had “previous discussions” about the problem of duplicity. Trammell‘s proposed jury instructions seem to reflect an awareness of the holding in Cronic; however, the proposed instructions were filed on October 25, 1996, and trial started October 22, 1996. In addition, the docket sheet does not reflect a challenge to the indictment based on duplicity. Thus, Trammell waived his duplicity challenge by failing to object to the indictment until after trial started. Moreover, he has not presented this court with any cause to justify his failure to challenge his indictment before trial. Because he did not timely challenge his indictment on duplicity grounds, he waived any later challenge based on a failure to use a special verdict form to avoid the alleged duplicity problem.
Even if the issue were properly before us, any possible error was cured by the district court‘s instructions. “One cure for an otherwise duplicitous indictment is to give an augmented instruction requiring unanimity on one or the other of the acts
The district court clearly provided a unanimity instruction:
The government has alleged the defendant‘s actions constituted: (1) a scheme to defraud, and/or (2) a scheme whereby defendant attempted to obtain money by false pretenses. In order to find defendant guilty of this offense, you must find the government has proven beyond a reasonable doubt the defendant pursued either (1) a scheme to defraud, or (2) a scheme whereby defendant attempted to obtain money by false pretenses. Furthermore, should you so decide, you must unanimously agree as to whether there was a scheme to defraud, or whether there was a scheme whereby defendant attempted to obtain money by false pretenses.
R. I, doc. 62, instr. 15 (emphasis added). Further, when discussing the charge of wire fraud, the district court instructed the jury that “[t]he law relating to a ‘scheme to defraud’ and taking by ‘false pretenses’ was discussed in the preceding instruction.”
Sentence Enhancement
Trammell argues the district court erred in enhancing his sentence for abusing a position of trust because he did not occupy a “formal position of trust” and did not create an impression that he occupied such a position. This court reviews the question of whether an individual occupied a position of trust in a particular transaction for clear error. See United States v. Queen, 4 F.3d 925, 928 (10th Cir. 1993).
A defendant‘s sentence should be enhanced when “the defendant abused a position of public or private trust, or used a special skill, in a manner that significantly facilitated the commission or concealment of the offense.”
As a licensed insurance agent, Trammell clearly held a “formal position of trust.” See Brunson, 54 F.3d at 678 (“Unlike a personal investment advisor/investor relationship, . . . no trust relationship exists between the two principals.“); Queen, 4 F.3d at 929 (“There is no question that, had the defendant actually been an investment advisor/broker as he represented to his victims, he would have occupied a position of trust.“); see also United States v. Stewart, 33 F.3d 764, 770 (7th Cir. 1994) (defendant occupied position of trust within meaning of
Trammell used his formal position as an insurance agent to solicit funds from investors by representing he would purchase annuities for them. He then spent the funds for his own personal benefit. After he had spent the money entrusted to him, he attempted
III.
Trammell‘s convictions and sentence are AFFIRMED.