Source: http://openjurist.org/print/508105
Timestamp: 2013-12-06 09:45:43
Document Index: 311032081

Matched Legal Cases: ['§1341', '§1341', '§1344', '§1341', '§1344', '§1344']

184 F3d 180 United States of America v. Bebe Fazia Laljie
184 F.3d 180 (2nd Cir. 1999)
UNITED STATES OF AMERICA, Appellee,v.BEBE FAZIA LALJIE, Defendant-Appellant.
Docket No. 98-1295August Term, 1998
Argued April 19, 1999Decided July 14, 1999
Appeal from an amended judgment of the United States District Court for the Southern District of New York, Sonia Sotomayor, Judge, convicting defendant of mail fraud and bank fraud, 18 U.S.C. §§1341, 1344.
Affirmed in part, reversed in part, and remanded for resentencing. DAVID C. FINN, Assistant United States Attorney, New York, New York (Mary Jo White, United States Attorney for the Southern District of New York, Christine H. Chung, Assistant United States Attorney, New York, New York, on the brief), for Appellee.
ABRAHAM HECHT, Forest Hills, New York, for Defendant-Appellant.
Defendant Bebe Fazia Laljie appeals from an amended judgment entered in the United States District Court for the Southern District of New York following a jury trial before Sonia Sotomayor, Judge, convicting her on 33 counts of mail fraud, in violation of 18 U.S.C. §1341 (1994), and 14 counts of bank fraud, in violation of 18 U.S.C. §1344 (1994). Laljie was sentenced principally to 57 months' imprisonment, to be followed by a five-year term of supervised release, and was ordered to pay restitution in the amount of $550,654.16. On appeal, she challenges the sufficiency of the evidence to support her convictions, the conduct of the trial, and the calculation of her sentence. We find merit only in the challenge to two counts of bank fraud.
The present prosecution arises out of Laljie's employment as the personal executive secretary of Richard J. Schmeelk. After Laljie left Schmeelk's employ, her successor noticed in one of Schmeelk's checking accounts a sizeable discrepancy between the balance reported by the bank and the balance shown in the handwritten check register that had been maintained by Laljie. Schmeelk initiated an investigation which revealed, inter alia, that numerous checks that he had signed in order to pay his and his family's expenses had been diverted by Laljie to her own use.
Laljie was indicted on 61 counts of mail fraud and 14 counts of bank fraud, each count relating to a different check. The government's proof at trial was presented principally through documentary evidence, the testimony of Schmeelk, and the testimony of others who preceded or succeeded Laljie as Schmeelk's personal executive secretary. Taken in the light most favorable to the government, the evidence revealed the following.
1. The Duties of Schmeelk's Personal Executive Secretary
Schmeelk, 73 years of age at the time of trial in 1997, was a former general partner of a major investment banking firm at which he had worked for more than 40 years. After retiring from that firm, he became cofounder and chairman of a merchant banking business. At trial, Schmeelk described the responsibilities of one serving as his personal executive secretary as they applied to Laljie, her successor, her predecessor, and her predecessor's predecessor. Both the predecessor and the successor to Laljie in that position also testified. The responsibilities of the position, to the extent pertinent to this prosecution, were essentially the same throughout a nearly 25-year period.
The duties of Schmeelk's personal executive secretary included managing his personal checking account (the "Schmeelk account") for the payment of his and his family's personal bills. Some of those bills were sent directly to Schmeelk's office; others, received at his home, were brought by Schmeelk to his office and given to his secretary for processing. The secretary was to prepare checks drawing on the Schmeelk account, attach the checks to the bills to which they related, and place the checks and bills in a folder. After a stack of bills had accumulated, she was to present the folder to Schmeelk. Schmeelk testified that he would generally "glance at" the bills before signing the corresponding checks (Trial Transcript ("Tr.") 142); Laljie's successor testified that Schmeelk would often sign the checks without looking at the bills. Laljie's predecessor testified that she normally presented him with several dozen checks at a time. During the course of a month, Schmeelk would sign approximately 75 to 100 checks in this manner.
From time to time, Schmeelk would also ask his secretary to obtain specified amounts of cash for him. Until mid-1995, the procedure was for the secretary to telephone his bank and ask to have that sum delivered. Thereafter, Schmeelk placed his personal account with a different bank and made arrangements with a convenient branch of that bank for his secretary simply to cash his checks made payable to "Cash." Using either procedure, the secretary would give Schmeelk an envelope containing the amount of cash he had specified. Schmeelk rarely counted the money handed to him in those envelopes.
In addition, Schmeelk would periodically entrust to the secretary several checks that he had signed but had left blank as to both amount and payee. They were to be used if a payment such as one for estimated income tax came due, or a family emergency occurred, at a time when Schmeelk was not available. In such an event, the secretary was to fill in the amount and the payee, make the payment, and record the information in the check register. Such presigned checks were used by Schmeelk's secretary approximately six times a year. Laljie's predecessor once attempted to show Schmeelk how such a check had been used, but he informed her that that was not necessary. Schmeelk generally did not inquire as to whether or how the presigned checks had been used.
In addition to preparing checks drawn on the Schmeelk account, Schmeelk's secretary was also responsible for accurately maintaining the check register and reconciling register entries with cancelled checks and the monthly balance reports prepared by Schmeelk's bank. Neither Schmeelk, nor his wife, nor his accountant normally reviewed those registers, checks, or reports.
2. Use of Schmeelk's Checks To Pay Laljie's Credit Card Bills
Laljie was employed as Schmeelk's personal executive secretary from November 1993 through June 1996, and her responsibilities included those described above. With respect to that period, the government presented evidence of, inter alia, 56 cancelled checks drawn on the Schmeelk account, each of which had been made payable to the issuer of a credit card for the account of Laljie or her husband. The majority were made payable to American Express, frequently in amounts that exactly matched the balances on American Express bills sent to Schmeelk and his wife. However, on the memo line of the checks, Laljie inserted the account number of herself or her husband, and Schmeelk's checks were mailed to American Express as payment on the Laljies' accounts. The amounts of those checks usually exceeded the amounts due on the Laljies' accounts, and the Laljies thereby accumulated significant credits in their accounts.
The remaining checks had been mailed to banks in Delaware (Advanta Corporation and CoreStates Bank), Atlanta, Georgia (Prudential Bank & Trust), and Uniondale, New York (First Bank Services). All of those banks were institutions at which the Schmeelks did not maintain credit card accounts but the Laljies did. Notwithstanding the fact that most of these checks were sent to Prudential Bank & Trust, First Bank Services, and Advanta, Laljie recorded them in the Schmeelk account's check register as payments to "Chemical Visa," an account of Mrs. Schmeelk. Similarly, one check to Prudential Bank & Trust making payment on Laljie's credit card account was recorded as having been paid to "Citibank Visa," a Schmeelk account; and a check making payment on Laljie's CoreStates account was recorded as a payment to "Visa Gold," another account of Mrs. Schmeelk.
Schmeelk testified that he never gave Laljie authority to use his funds to pay any of her credit card accounts.
3. The Altered Checks Payable to "Cash"
Laljie also, like her predecessors, had responsibility for obtaining cash for Schmeelk in amounts he specified. In 1995, Schmeelk's personal account was placed with a bank that had a branch in the lobby of the building in which Schmeelk's office was located. Schmeelk gave that branch a letter with respect to that account, indicating that Laljie was authorized to endorse and cash his checks made payable to "Cash." The government introduced 12 cancelled checks, the earliest dated September 14, 1995, drawn on the Schmeelk account, signed by Schmeelk, and made payable to "Cash" (the "Cash checks"). On each such check, the amount had been altered.
A forensic document examiner testified that each of the Cash checks had been typed and had then been "put back in a typewriter and carefully aligned"; the typist had used correction tape to lift certain characters from the face of the checks and had then typed in their place different characters. (Tr. 484.) For example, on one Cash check a "1" had been replaced with a "2," and the word "one" replaced with "two," so that a check originally for $1,000 became a check for $2,000. (Tr. 471.) Similarly, the original $2,000 amount of another Cash check had been changed to $4,000.
Schmeelk testified that when he asked Laljie to write a Cash check, he never asked or authorized her to increase the amount above that originally requested.
4. The Checks Made Payable to "New Sights, Inc."
The government also introduced two cancelled checks in amounts totaling more than $55,000, drawn on the Schmeelk account and signed by Schmeelk, that had been made payable to "New Sights, Inc." ("New Sights"). The name "New Sights," however, did not appear in any check register entry. On the memo lines of the New Sights checks, Laljie had written the name "Avanti," a real estate investment company partly owned by Schmeelk; and in each of the check register entries corresponding to the two New Sights checks, Laljie had written the Avanti name and the name of one of that group's real estate properties. Neither Avanti nor Avanti's properties received either the New Sights checks or any benefit from them. New Sights, the payee, which cashed the checks, was a real estate company owned by Laljie's husband.
Schmeelk testified that he was not aware of having signed checks made payable to New Sights and that he never authorized payments to New Sights.
B. Laljie's Statements to the Private Investigators
Schmeelk terminated Laljie's employment as his personal executive secretary in mid-1996, citing various deficiencies in her work. Some months later, Laljie's successor discovered some of the discrepancies in the Schmeelk account. After a thorough investigation revealed diversions totaling more than $800,000, Schmeelk brought a civil action against Laljie in state court; his attorneys hired licensed private investigator Dennis Dwyer, a former United States Secret Service agent, to determine the extent of Laljie's assets and to ascertain what had become of the embezzled funds. At the trial in the present case, Dwyer testified that in December 1996 he and a colleague, Edward Engel, went to Laljie's home to serve her with, inter alia, a state-court restraining order, freezing her assets, and to conduct an interview.
Dwyer testified that Laljie invited them into her home and spoke with them for nearly two hours. Dwyer told Laljie that they "wanted to talk to her about the fact that $800,000 of Mr. Schmeelk's personal checks had been fraudulently used to pay her American Express and Visa accounts" (Tr. 361-62), and they showed her copies of certain of those checks. Dwyer testified that Laljie initially replied that she had "never signed [Schmeelk's] name on any of the checks" (Tr. 364); that when Dwyer informed her that she was suspected not of forging the signatures but of misdirecting Schmeelk's checks to her own creditors, "she acknowledged that she had in fact used those checks without Mr. Schmeelk's permission to pay her own credit card accounts" (id.); and that Laljie said she had considered herself underpaid as Schmeelk's secretary, especially given Schmeelk's wealth, and had felt she deserved extra compensation.
According to Dwyer, Laljie described the three methods by which she had embezzled funds from the Schmeelk account, to wit, the payments on the Laljies' credit card accounts, the payments to New Sights, and the alteration of the Cash checks, and said she had found the process "very easy" (Tr. 371):
She said when she first started, she would insert one of her invoices from American Express with a check that she had prepared into this stack of correspondence, that Mr. Schmeelk would sign without looking at it, and that he would just go ahead and sign it . . . she said she started with small amounts and that it just kept on growing. When she began, she just couldn't stop.
(Id.) Dwyer testified that he took contemporaneous notes of his conversation with Laljie. Those notes included the notation "cash checks to bank downstairs, 1-2, 2-4," which Dwyer explained was his shorthand description of Laljie's explanation that, before Cash checks signed by Schmeelk were presented to the bank branch in the lobby of the building, "the amounts were altered from 1,000 to 2,000 or 2,000 to 4,000." (Tr. 428 (internal quotation marks omitted).)
Dwyer testified that Laljie told him she wanted to make restitution to Schmeelk but she had already spent the embezzled funds on extensive home renovations, jewelry, a first-class vacation with her husband in Aruba, and various other luxury items.
In the present case, a 75-count superseding indictment against Laljie charged her with 61 counts of mail fraud in violation of §1341 in connection with the checks sent to pay the Laljies' credit card bills (counts 1 61); two counts of bank fraud in violation of §1344 in connection with the New Sights checks (counts 62 and 63); and 12 counts of bank fraud in violation of §1344 in connection with the Cash checks (counts 64 75). Counts 34, 41, 43, 49, and 58 were voluntarily dismissed by the government before