Opinion ID: 582485
Heading Depth: 2
Heading Rank: 2

Heading: Merit

Text: 36 Merit timely moved for a Fed.R.Crim.P. 29 judgment of acquittal on the ground that the call to Skinner on June 4, 1984, was not in furtherance of or in execution of the scheme to defraud. He argues that the motion should have been granted because the call did not involve the sale of unregistered stock, but instead involved a possible loan of money from Skinner to Tracon in return for a promissory note secured by specific parcels of real estate. 37 To support a conviction under 18 U.S.C. § 1343, the call need not be an essential part of the contemplated scheme, [but] need only be made for the purpose of executing the scheme. United States v. Garner, 663 F.2d 834, 838 (9th Cir.1981), cert. denied, 456 U.S. 905 (1982). The transcript of the call shows that Merit and Skinner discussed the mining equipment at the Arizona site, the production start-up date, a brochure Skinner was preparing to promote the Tracon mine to potential investors, and Skinner's anticipated visit to the mine site. The discussion was for the purpose of executing [the] scheme to defraud. 18 U.S.C. § 1343. Even if Merit and Skinner had only discussed the loan desired by Merit, as Merit claims, to the extent that Merit sought the loan to keep Tracon afloat, the call was for the purpose of executing [the] scheme to defraud. See United States v. Cusino, 694 F.2d 185, 187 (9th Cir.1982) (Usefulness [of the wire transmissions] to the perpetrator is sufficient under section 1343.), cert. denied, 461 U.S. 932 (1983). Accordingly, there was substantial relevant evidence produced from which the jury reasonably could have found the defendant guilty beyond a reasonable doubt. United States v. Sarault, 840 F.2d 1479, 1487 (9th Cir.1988). 38 Merit next challenges the sufficiency of the evidence under counts 1 and 14. He argues that because his prior Elkins Act conviction and SEC injunction were public, non-corporate information, his failure to disclose them to investors could not constitute fraudulent conduct under the wire fraud statute in the absence of a duty to disclose, and could not support his conviction for conspiracy under count 14. 39 The scheme to defraud, however, involved both affirmative misrepresentations and material omissions. Many of the victims of the scheme testified that they were induced to invest in Tracon by the defendants' misrepresentations regarding the mine's potential and past production, Merit's past business activities, and the ownership of the mining equipment. 3 40 Although in this circuit a non-disclosure can only serve as a basis for a fraudulent scheme when there exists an independent duty that has been breached by the person so charged, United States v. Dowling, 739 F.2d 1445, 1449 (9th Cir.1984), rev'd on other grounds, 473 U.S. 207 (1985), the government's case did not rest solely on the alleged omissions. Evidence of affirmative misrepresentations sufficiently established the requisite scheme to defraud under the wire fraud statute. See United States v. Benny, 786 F.2d 1410, 1418 (9th Cir.) (Proof of an affirmative, material misrepresentation supports a conviction of mail fraud without any additional proof of a fiduciary duty.), cert. denied, 479 U.S. 1017 (1986); cf. United States v. Biesiadecki, 933 F.2d 539, 542-43 (7th Cir.1991) (district court did not abuse its discretion in admitting evidence of omissions where there was also abundant evidence of affirmative misrepresentations). Therefore, it is unnecessary for us to decide whether Merit and his codefendants owed an independent duty to the potential investors in this case.