Opinion ID: 501896
Heading Depth: 3
Heading Rank: 2

Heading: Kilpatrick

Text: 31 The remaining issue we must decide is whether the jury properly convicted Kilpatrick on the substantive mail fraud counts. In his defense Kilpatrick argues first that the evidence presented in the trial below was insufficient to establish that there was a scheme to defraud customers, a necessary element of the crime. We find this contention without merit. The evidence clearly shows that Kilpatrick knew that the ZCTIs were not properly collateralized. Kilpatrick argues, however, that he fully intended to purchase a sufficient amount of bonds to cover the investment. He claims that his understanding was that the bonds were necessary only when the ZCTIs mature, i.e., ninety days after sale. Such an understanding has no basis in logic. There is no reason to purchase collateral to secure an investment after the investment matures. After maturity, the risk inherent in any investment is over. Furthermore, Kilpatrick did not represent to his brokers or to the government agent that the investments would eventually be backed by government bonds; he represented that the ZCTIs were backed by bonds before they were sold. 32 Kilpatrick next intimates that, when referring to zero coupon bonds, he represented the face value of the bonds and not the market value. The face value of a zero coupon bond is its value in fifteen to thirty years. In the instant case, the actual or market value of the bonds was ten cents on the dollar. Thus, Kilpatrick maintains that his representation that GIC had $10 to $12 million in bonds actually meant that the company had between $1 and $1.2 million in collateral. But GIC brokers sold over $6 million worth of ZCTIs. The record reflects no reason to believe Kilpatrick thought $1.2 million in collateral could secure $6 million in investments. 33 Kilpatrick does not challenge whether he caused use of the mails in his scheme to defraud. In any event, conviction under this statute does not require that the defendant actually intended to use the mails, but only that he acted with knowledge that the mails would be used in the ordinary course of business. United States v. Martino, 648 F.2d 367, 401 (5th Cir.1981), cert. denied, 456 U.S. 943, 102 S.Ct. 2006, 72 L.Ed.2d 465 (1982). There is sufficient evidence to allow the jury to conclude that Kilpatrick caused use of the mails or at least reasonably could foresee its use in furthering his scheme. Martino, 648 F.2d at 401; United States v. Georgalis, 631 F.2d 1199, 1206 (5th Cir.1980). 34 In oral argument before this court, counsel for Kilpatrick argued that, if appellant salespersons were acquitted of the mail fraud charges, then we must also acquit Kilpatrick since he was indicted as an aider and abettor to mail fraud. The law is well settled that, while conviction of a principal is not a prerequisite to the conviction of an aider and abettor, the government must nonetheless establish beyond a reasonable doubt that the alleged offense was committed by someone. United States v. Barfield, 447 F.2d 85, 89 (5th Cir.1971); United States v. Merriwether, 329 F.Supp. 1156, 1159-60 (S.D.Ala.1972), affirmed, 469 F.2d 1406 (5th Cir.1972). We have found that the brokers named in the indictment did not commit mail fraud. In the indictment, however, the government did not charge Kilpatrick as an aider and abettor, but as a principal. While the government briefed the case as though Kilpatrick was an aider and abettor, the government, to its advantage, is nonetheless bound by the indictment. The evidence supports Kilpatrick's conviction as a principal. 35 Kilpatrick argues, however, that we cannot uphold his conviction as a principal since he had no direct contact with GIC's defrauded customers. His lack of contact with the victims does not insulate Kilpatrick from criminal liability. Misrepresentation is not an element of the crime with which Kilpatrick is charged. To secure a mail fraud conviction, all the government must prove is 1) the existence of a scheme to defraud, which we find in the record, and 2) use of the mails by the defendant to further the scheme, which also is reflected in the record. Haimowitz, 725 F.2d at 1568-69; Hartley, 678 F.2d at 985. Therefore, Kilpatrick's conviction may stand regardless of whether he actually made misrepresentations directly to GIC customers. 36 Kilpatrick's remaining challenges to the trial below merit little attention. Kilpatrick asserts that the trial judge committed reversible error in failing to instruct the jury that good faith reliance on the advice of counsel is a bar to charges of mail fraud. The record, however, does not reflect a need for the instruction. GIC's attorney told Kilpatrick that the ZCTIs were exempt securities and therefore legal even though not registered. The attorney did not tell Kilpatrick he could sell exempt securities regardless of whether he had sufficient collateral for the securities. Counsel's advice does not concern the matter presented in the indictment. 6 Consequently, we find no error in the trial judge's refusal to grant Kilpatrick's good faith reliance instruction. See United States v. Johnson, 730 F.2d 683, 686 (11th Cir.), cert. denied, 469 U.S. 867, 105 S.Ct. 211, 83 L.Ed.2d 142 (1984). 37 Finally, Kilpatrick claims the district court committed reversible error in failing to instruct the jury, sua sponte, that the court admitted evidence of the consent decree for a limited purpose. United States v. Cortez, 757 F.2d 1204, 1207 (11th Cir.), cert. denied, 474 U.S. 945, 106 S.Ct. 310, 88 L.Ed.2d 287 (1985). Such omission does not amount to plain error resulting in a miscarriage of justice in the instant case. United States v. Young, 470 U.S. 1, 15, 105 S.Ct. 1038, 1046, 84 L.Ed.2d 1, 12-13 (1985); United States v. Atkinson, 297 U.S. 157, 160, 56 S.Ct. 391, 392, 80 L.Ed. 555, 557 (1936). 38 For the foregoing reasons, we reverse the lower court's convictions of appellants Brown, Gruber, Parker and Anderson on both the conspiracy and fraud counts. We reverse the lower court conviction of Kilpatrick on the conspiracy count and affirm the conviction on the fraud counts. 39 AFFIRMED in part, REVERSED in part.