Opinion ID: 523609
Heading Depth: 2
Heading Rank: 1

Heading: Constructive Trust Instruction

Text: 11 Defendant's principal argument attacks the following constructive trust instruction given by the district court: 12 An employee has no right to money acquired through an intentional breach of his duty to his employer; that money properly belongs to the employer to whom the employee has the duty. (Tr. 917). 13 If Wilkus had been indicted and the case had been tried under the above instruction, and if that instruction had stood alone, his argument might succeed under United States v. Holzer, 840 F.2d 1343 (7th Cir.1988). 2 However, the crucial instruction in this case contained the following three requisites for conviction: 14 Now, to sustain the charge of mail fraud the Government must prove the following propositions: First, that the defendant knowingly devised the scheme to defraud and obtained money from Chicago Mercantile Exchange by means of false pretenses, representations or promises, as described in the indictment. 15 Second, that for the purpose of carrying out the scheme or attempting to do so, the defendant used the United States mails, or caused the United States mails to be used in the manner charged in the particular count. 16 Third, that the defendant did so knowingly and with the intent to defraud. 17 If you find from your consideration of all of the evidence that each of these propositions has been proved beyond a reasonable doubt then you should find the defendant guilty. (Tr. 916). 18 These three essentials were devoid of any reference to a constructive trust. Similarly, the indictment was not based on such a theory. Finally, the evidence showed that the CME had been defrauded of $350,000 under defendant's scheme. Consequently, this case contains all the tangible rights elements required by McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987). In such a setting the criticized instruction was mere surplusage. 19 Even accepting Wilkus' principal defense, the result remains the same. Wilkus argues that neither Walker Equipment nor Roanwell would sell the communications equipment to a non-distributor 3 and, according to Wilkus' testimony regarding an alleged conversation with his supervisor Robert Old, 4 CME was unwilling to become a distributor. Thus, argues Wilkus, his scheme did not defraud CME of property; rather it merely exploited an opportunity that CME had declined to assume. 20 Wilkus' argument ignores a crucial distinction. His opportunity for tangible gain was enhanced by the fact that, as he testified, he was the sole bargaining representative for both ITS and CME; consequently, no bargaining ever really occurred. He further testified that if [CME] would have asked, [he] probably would have reduced the price to CME by up to $100,000 (Tr. 786). This scheme is not, as Wilkus contends, simply usurpation by an employee of an opportunity already declined by his employer, but rather is a garden-variety fraud, akin--if not identical--to bid-rigging. Had Wilkus, the purchasing agent, conspired with a seller to rig a bidding process and then split the inflated profits from the sale, without doubt CME would be deemed to have suffered a tangible loss. See, e.g., Moore v. United States, 865 F.2d 149 (7th Cir.1989). It is entirely disingenuous for him now to argue that simply because he was both purchasing agent and seller, and thus retained all the profits inuring from the sales occasioned by his unilateral acts as opposed to having to split the profits with a co-conspirator, he did not deprive CME of money, but only exploited an opportunity known and declined. The constructive trust instruction, aside from being cured by the remaining instructions, was superfluous because according to his own testimony, Wilkus' profits stemmed from a fraudulently inflated price.