Opinion ID: 529395
Heading Depth: 2
Heading Rank: 1

Heading: The Effect of McNally

Text: 11 The jury returned a verdict of guilty on Count One of the indictment which charged defendant with conspiracy to commit four substantive offenses against the United States. 4 Conspiracy to commit an offense against the United States violates 18 U.S.C.A. Sec. 371, which provides: 12 If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined not more than $10,000 or imprisoned not more than five years, or both. 13 (emphasis added). This statute is written in the disjunctive. A violation occurs if the defendant conspires to commit one or more substantive offenses against the United States, or if the defendant conspires to defraud the government in any manner or for any purpose. 14 Defendant was charged with conspiring to commit, among other things, the substantive offense of wire fraud against the United States. See 18 U.S.C.A. Sec. 1343. That statute prohibits the use of wire transmission services in furtherance of any scheme or artifice to defraud. The object of the scheme alleged was to defraud the United States of the right to implement its foreign policy free from stealth, false statement, and fraud. 15 Three weeks after defendant's conviction, the Supreme Court decided McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987). In McNally, the Supreme Court held that 18 U.S.C.A. Sec. 1341, the mail fraud statute, 5 applies only to schemes to defraud others of property rights. The Court held that a scheme to defraud citizens of their interest in fair and effective government does not violate section 1341. Id. 107 S.Ct. at 2879. Thus, the wire and mail fraud statutes are limited to schemes to deprive others of property rights, although the object of the scheme to defraud may be intangible property rights. See Carpenter v. United States, 108 S.Ct. 316 (1987). 16 McNally applies retroactively. See Griffith v. Kentucky, 479 U.S. 314, 328, 107 S.Ct. 708, 716, 93 L.Ed.2d 649 (1987); see also United States v. Asher, 854 F.2d 1483, 1487 (3rd Cir.1988), cert. denied, --- U.S. ----, 109 S.Ct. 836, 102 L.Ed.2d 969 (1989). Under McNally, defendant could not be convicted of the substantive offense of wire fraud where the object of the scheme was to deprive the government of its right to control its foreign policy. See generally United States v. Dynalectric Co., 859 F.2d 1559, 1570 (11th Cir.1988). Because the object of the scheme to defraud the government alleged in the indictment is not sufficient to violate section 1343, that scheme does not constitute conspiracy to commit a substantive offense against the United States in violation of the first portion of section 371. See McNally, 483 U.S. at 361, 107 S.Ct. at 2882 (The Government concedes that if petitioners' substantive mail fraud convictions are reversed their conspiracy convictions should also be reversed.); see also United States v. Hilling, 863 F.2d 677 (9th Cir.1988). 17 An individual may also violate section 371, however, by conspiring to defraud the United States in any manner or for any purpose. The scope of defraud in section 371 is broader than defraud as used in section 1343. In McNally itself, the Court stated that to defraud the government within the meaning of section 371 also means to interfere with or obstruct one of its lawful governmental functions by deceit, craft or trickery, or at least by means that are dishonest. McNally, 483 U.S. at 358 n. 8, 107 S.Ct. at 2881 n. 8 (quoting Hammerschmidt v. United States, 265 U.S. 182, 188, 44 S.Ct. 511, 512, 68 L.Ed. 968 (1924)). Therefore, although the object of the scheme alleged in the indictment, to defraud the government of its right to implement its foreign policy, would not support a wire fraud conviction after McNally, it would support a conviction under section 371 of conspiracy to defraud the government. 18 [A] general verdict must be set aside if the jury was instructed that it could rely on any of two or more independent grounds, and one of those grounds is insufficient, because the verdict may have rested exclusively on the insufficient ground. Zant v. Stephens, 462 U.S. 862, 881, 103 S.Ct. 2733, 2745, 77 L.Ed.2d 235 (1983). A conviction can be affirmed, however, where the legally insufficient charge includes all the elements of a separate, legally sufficient charge also contained in the indictment. In such a situation, the reviewing court can be confident that if the jury found all the elements necessary to convict the defendant on the legally insufficient charge, it must also have found all the elements necessary to convict on the legally sufficient charge. See, e.g., United States v. Kato, 878 F.2d 267, 269-70 (9th Cir.1989); United States v. Odom, 858 F.2d 664, 666 n. 1 (11th Cir.1988); see generally United States v. Ochs, 842 F.2d 515, 520 (1st Cir.1988). In this case, if the jury convicted defendant on the wire fraud charge, it necessarily must have found all the elements necessary to sustain a conviction for conspiracy to defraud the government under section 371. 19 This Court cannot affirm a criminal conviction based on a theory not contained in the indictment, see generally Stirone v. United States, 361 U.S. 212, 215-17, 80 S.Ct. 270, 272-73, 4 L.Ed.2d 252 (1960), or not presented to the jury. See generally Chiarella v. United States, 445 U.S. 222, 237 n. 21, 100 S.Ct. 1108, 1119 n. 21, 63 L.Ed.2d 348 (1980). The scope of a conspiracy is that charged in the indictment. United States v. Dynalectric Co., 859 F.2d at 1564. Conspiracy to defraud is a different substantive offense from conspiracy to commit wire fraud. See e.g., United States v. Sjeklocha, 843 F.2d 485, 486 (11th Cir.1988). The dispositive issue on defendant's appeal from his conspiracy conviction, then, is whether the indictment charged him with conspiracy to defraud the United States. 20 An indictment must set forth the elements of the offense in a manner which fairly informs the defendant of the charges against him and enables him to enter a plea which will bar future prosecution for the same offense. Belt v. United States, 868 F.2d 1208, 1211 (11th Cir.1989) (citing Hamling v. United States, 418 U.S. 87, 117, 94 S.Ct. 2887, 2907, 41 L.Ed.2d 590 (1974)). See generally Russell v. United States, 369 U.S. 749, 763, 82 S.Ct. 1038, 1046, 8 L.Ed.2d 240 (1962). In this case, the indictment charged defendant with conspiracy to commit four substantive offenses against the United States. Although the fraud was charged as the object of the substantive offense of wire fraud rather than as the object of the conspiracy, defendant had clear notice that violations of the substantive offenses constituted fraud against the government. Conspiracy to violate the substantive offenses is conspiracy to defraud the government. Reading the indictment as a whole, we conclude that the indictment adequately charged defendant with conspiring to deprive the United States of its ability to control its foreign policy by concealing material facts from responsible government agencies. 21 We also conclude that the district court adequately charged the jury on conspiracy to defraud the United States. The court instructed the jury fully on the elements of conspiracy. The court then instructed the jury as follows: 22 The fourth object of the conspiracy was to devise a scheme and artifice to defraud the United States and its executive agencies of the right to implement its foreign policy and to conduct its affairs free from stealth. Here again, it is alleged that it was a part of this object of the conspiracy that interstate or international wire communications would be used. 23 Vol. 29, at 17-18. The district court clarified and repeated this instruction as follows: 24 What must be proved beyond a reasonable doubt is that the accused planned knowingly and willfully to devise or intending--to devise a scheme to defraud the United States of America and its executive agencies out of the right to implement its foreign policy and to conduct its affairs free from stealth, false statement, and fraud and that the use of the interstate wire or foreign wire communications were to be closely related to the scheme. 25 Vol. 29, at 34. Conspiracy to commit wire fraud against the United States contains all of the elements of conspiracy to defraud the United States. Conspiracy to commit wire fraud contains the additional element of use of wire transmission services in furtherance of the scheme to defraud. The district court's charge to the jury, as indicated by the above passages, instructed the jury fully on the elements of conspiracy to defraud the United States in violation of section 371. 26 The jury could not have convicted defendant of conspiracy in this case without having found an unlawful object of the conspiracy. The indictment adequately charged defendant with conspiracy to defraud the United States, and the jury was adequately charged on this object of the conspiracy. Under similar circumstances, Kato, supra, the Ninth Circuit affirmed a defendant's conspiracy conviction. We agree with the logic of the Ninth Circuit in Kato, and the First Circuit in Ochs, and consequently we affirm defendant's conviction on the conspiracy count in this case.