Opinion ID: 552757
Heading Depth: 2
Heading Rank: 2

Heading: The Sufficiency of the Evidence on the Wire Fraud Counts

Text: 16 Appellant claims there was insufficient evidence to convict her on the two counts of wire fraud charged against her. 8 Specifically, she asserts that (1) the wire transmissions alleged in the indictment were not made for the purpose of executing the scheme to defraud under 18 U.S.C. Sec. 1343 because they did not occur prior to the fruition of, or bear a sufficient connection to, the scheme; (2) she violated no trust or fiduciary duty; and (3) no fraudulent scheme existed because no reasonable person would have believed appellant's misrepresentations. We reject all of these arguments. 17 The standard for overturning a guilty verdict on the grounds of insufficiency of evidence is a demanding one. A conviction should be reversed only where the evidence is such that, viewing it in the light most favorable to the government, a reasonable trier of fact could not have found guilt beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 318-19, 99 S.Ct. 2781, 2788-89, 61 L.Ed.2d 560 (1979); United States v. Thomas, 864 F.2d 188, 191 (D.C.Cir.1988). The evidence need not exclude every reasonable hypothesis of innocence or be wholly inconsistent with every conclusion except that of guilt. United States v. Harrell, 737 F.2d 971, 979 (11th Cir.1984), cert. denied, 469 U.S. 1164, 105 S.Ct. 923, 83 L.Ed.2d 935 (1985), 470 U.S. 1027, 105 S.Ct. 1392, 84 L.Ed.2d 781 (1985). No distinction is made between direct and circumstantial evidence in evaluating the sufficiency of evidence supporting a guilty verdict. See Holland v. United States, 348 U.S. 121, 139-40, 75 S.Ct. 127, 137-38, 99 L.Ed. 150 (1954); United States v. Staten, 581 F.2d 878, 882 (D.C.Cir.1978). 18 Wire fraud requires proof of (1) a scheme to defraud; and (2) the use of an interstate wire communication to further the scheme. 9 See United States v. Pollack, 534 F.2d 964, 971 (D.C.Cir.), cert. denied, 429 U.S. 924, 97 S.Ct. 324, 50 L.Ed.2d 292 (1976). The government offered substantial evidence--which appellant does not challenge in this appeal--that appellant engaged in a fraudulent loan scheme by misrepresenting to Robert Capuano and James Whatley by means of interstate wire communications that a large loan would be funded, proceeds of which would be divided among Capuano, Whatley, and a number of other interested borrowers, if the participants deposited certain advance fees into an escrow account controlled by appellant. She further misrepresented in communications over interstate wires that the funds would be refunded in full if the loan application was not successful; that she was the trustee for a group of off-shore lenders; and that the loans would be funded by these lenders. Finally, appellant's actions caused Whatley and Capuano to transfer funds into appellant's account via interstate wire. 19 Courts have had no difficulty in finding that fraudulent schemes of this type are encompassed by Sec. 1343. See, e.g., United States v. Lanier, 838 F.2d 281, 283-84 (8th Cir.1988) (defendant represented to potential borrowers that he could obtain large loans for them; applicants were required to deposit certain advance fees into an escrow account, which fees would be returned if loans were not funded; loans were never funded and fees were not returned); United States v. Brown, 739 F.2d 1136, 1149 (7th Cir.1984) (defendant perpetrated fraudulent loan brokerage scheme involving payment of fees by borrowers for letters of credit to guarantee loans; loans were never funded and advances were not returned), cert. denied, 469 U.S. 933, 105 S.Ct. 331, 83 L.Ed.2d 268 (1984); United States v. Urban, 746 F.2d 1345, 1346 (8th Cir.1984) (similar scheme perpetrated on farmers). The evidence presented by the government in this case amply supported the conclusion that appellant's fraudulent wire communications occur[red] prior to the fruition of and [bore] a sufficient connection to the realization of the scheme to be considered as made for the purpose of executing the scheme. United States v. Pollack, 534 F.2d at 971 (applying United States v. Maze, 414 U.S. 395, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974)). 20 This conclusion is not affected by the fact that an intermediary used by appellant was the person who actually entered into written agreements with the victims. The evidence clearly showed that appellant devised the scheme and furthered it by means of wire communications directly with the victims and indirectly via her intermediary. All that is required is that appellant have knowingly and willingly participated in the scheme; she need not have performed every key act herself. See, e.g., United States v. Lanier, 838 F.2d at 284 (evidence sufficient where defendant did not directly make misrepresentations to victims but did participate in scheme knowing it was fraudulent); United States v. Wiehoff, 748 F.2d 1158, 1161 (7th Cir.1984) (evidence need only show that defendant was a knowing and active participant in scheme to defraud and that scheme involved interstate wire communications). 21 Appellant's next argument, that she violated no trust or fiduciary duty, relies on the statement in United States v. Lemire, 720 F.2d 1327, 1335 (D.C.Cir.1983), cert. denied, 467 U.S. 1226, 104 S.Ct. 2678, 81 L.Ed.2d 874 (1984), that [a]t the core of the judicially defined 'scheme to defraud' [under the wire fraud statute] is the notion of a trust owed to another and a subsequent breach of that trust. The specific scheme at issue in Lemire, however, grew out of the abuse of a fiduciary relationship between employer and employee, and the opinion does not address what level of trust or type of relationship is required in fraudulent schemes of the type at issue in this case. As the results in Lanier, Brown, and Urban, supra, make clear, the establishment of a fraudulent loan scheme such as appellant devised here meets whatever level of trust is required. Appellant clearly held herself out as the trustee of the escrow account into which Whatley and Capuano deposited money and thus, by her own actions and representations, she assumed the responsibilities and duties attendant to such a position of trust. We conclude that her violation of that trust fully comports with the requirements of the wire fraud statute. 22 Appellant's final challenge to her wire fraud convictions is that no fraudulent scheme existed because no reasonable person would have believed her misrepresentations. Appellant is simply wrong, however, if she means to assert that the wire fraud statute does not apply where the persons defrauded unreasonably believed the misrepresentations made to them. In the words of one court, it makes no difference whether the persons the scheme is intended to defraud are gullible or skeptical, dull or bright.... The only issue is whether there is a plan, scheme or artifice intended to defraud. United States v. Brien, 617 F.2d 299, 311 (1st Cir.1980) (collecting other cases holding similarly), cert. denied, 446 U.S. 919, 100 S.Ct. 1854, 64 L.Ed.2d 273 (1980). This circuit applies the same standard. See Deaver v. United States, 155 F.2d 740, 744-45 (D.C.Cir.1946) (in mail fraud prosecution, the monumental credulity of the victim is no shield for the accused), cert. denied, 329 U.S. 766, 67 S.Ct. 121, 91 L.Ed. 659 (1946); United States v. Pollack, 534 F.2d at 971 (to hold that actual loss to victim is required would lead to the illogical result that the legality of a defendant's conduct would depend on his fortuitous choice of a gullible victim). 23