Opinion ID: 2749072
Heading Depth: 4
Heading Rank: 1

Heading: Count 1 – mail fraud based on lulling letter

Text: from Brown to Teresa R. dated August 30, 2006. Brown drafted a lulling letter dated August 30, 2006 and postmarked September 5, 2006 to Teresa R. Eddings argues that, because Teresa R.’s interactions were with Brown, not him, there was no evidence from which to conclude that the letter was in furtherance of a joint fraud scheme. But, because Eddings knowingly participated in the Ponzi scheme, he “is liable for his co-schemers’ use of the mails or 16 UNITED STATES V. BROWN wires.” United States v. Blitz, 151 F.3d 1002, 1006 (9th Cir. 1998) (citation and internal quotation marks omitted). Brown’s mailing was part of the scheme because it served “the purpose of lulling [the] victims.” United States v. Sampson, 371 U.S. 75, 78, (1962). Substantial evidence supports the conclusion that Eddings was participating in the Ponzi scheme when the letter was sent to Teresa R. Brown testified that, by that time, Eddings was aware of the lulling letters. Moreover, in November 2005, Eddings deposited new investor money to his WISE Investors account and immediately used those funds to pay Brown’s old investors; he continued to deposit investor funds in that account through May 7, 2007.