Opinion ID: 4542478
Heading Depth: 2
Heading Rank: 1

Heading: Fraud Convictions

Text: A defendant raising a challenge to the sufficiency of the evidence must meet a “demanding legal standard[.]” United States v. Potter, 927 F.3d 446, 453 (6th Cir. 2019). The defendant must show that no “rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” Id. (citation omitted). Black has not met this standard for his fraud convictions. 5 Nos. 19-5088/5374, United States v. Black 1. Mail Fraud. The mail-fraud statute consists of one very long sentence: Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, . . . for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both. 18 U.S.C. § 1341. We have read this language to require, among other things, that a defendant devise a “scheme to defraud” and use “the mails in furtherance of that scheme.” United States v. Petlechkov, 922 F.3d 762, 766 (6th Cir. 2019); United States v. Warshak, 631 F.3d 266, 310–11 (6th Cir. 2010); United States v. Frost, 125 F.3d 346, 354 (6th Cir. 1997). Black challenges the sufficiency of the evidence only for the use-of-the-mails element, arguing that the government failed to prove that he used the mails to further the scheme to defraud the Trust. The Supreme Court has long read this element in a “fairly expansive” fashion. Warshak, 631 F.3d at 311; see Schmuck v. United States, 489 U.S. 705, 710–11 (1989); Pereira v. United States, 347 U.S. 1, 8–9 (1954). That is true both for the connection that a mailing must have to the defendant and for the connection that it must have to the fraud. Start with the mailing’s connection to the defendant. Because the statute reaches a defendant who knowingly “causes” mail to be delivered, 18 U.S.C. § 1341, the “defendant may commit mail fraud even if he personally has not used the mails,” Frost, 125 F.3d at 354. The Supreme Court has instead held that if “one does an act with knowledge that the use of the mails will follow in the ordinary course of business, or where such use can reasonably be foreseen, even though not 6 Nos. 19-5088/5374, United States v. Black actually intended, then he ‘causes’ the mails to be used.” Pereira, 347 U.S. at 8–9; see United States v. Ramer, 883 F.3d 659, 683 (6th Cir. 2018). Turn to the mailing’s connection to the fraud. The statute indicates that a defendant must use the mails “for the purpose” of executing the fraud scheme. 18 U.S.C. § 1341. Yet the Supreme Court has held that the mailing itself need not be “an essential element” of that scheme; the mailing need only be “incident to an essential part” of it. Pereira, 347 U.S. at 8; see Schmuck, 489 U.S. at 710–11. And the mailing may qualify even if it is “innocent or even legally necessary,” Frost, 125 F.3d at 354 (citation omitted), so long as it somehow aids the scheme, Ramer, 883 F.3d at 684; United States v. Hartsel, 199 F.3d 812, 818 (6th Cir. 1999). A comparison of Ramer and Hartsel illustrates these rules in practice. In Ramer, the defendants “schemed to defraud investors through the marketing of a series of spurious oil and gas drilling projects.” 883 F.3d at 667. To meet the use-of-the-mails element, the government relied on mailings about legitimate matters between a state government and a legitimate oil facility. Id. at 668, 684. One defendant argued that these mailings did not suffice. We disagreed: “A mailing need not be unlawful when viewed in isolation in order to be made ‘in furtherance of the scheme;’ to the contrary, mailings that advance fraudulent schemes will often appear to be quite legitimate.” Id. at 684. And the legitimate oil facility helped the scheme because the defendants used it “to reassure investors by reference to [the facility’s] legitimate operations[.]” Id. So a rational jury could find that the routine mailings also aided the scheme by bolstering the legitimate nature of those operations. Id.; see United States v. Bankston, 820 F.3d 215, 235–36 (6th Cir. 2016). In Hartsel, by contrast, the government argued that the defendant fraudulently used a charity’s money for personal ends. 199 F.3d at 814–15. To meet the use-of-the-mails element, the government relied on bank statements for the charity’s bank account that the bank mailed to the 7 Nos. 19-5088/5374, United States v. Black defendant. Id. We found that the bank account was an “essential part” of the scheme and that “the mailing of the bank statements was incident to the maintenance of that account.” Id. at 818. But we overturned the conviction because we saw no evidence that the statements were “used in some way to aid or further the scheme.” Id. No evidence suggested the defendant had ever used the statements for “a bookkeeping or accounting function” or that he needed them “to reconcile the account and ensure it maintained a positive balance during the period of the scheme.” Id. In this case, the government relied on mailings about Black’s bond renewal to meet the use-of-the-mails element. Recall that the probate court required Black to post a $310,000 bond to serve as trustee. Black got this bond from a Michigan insurance company through Lionel Hughes, his predecessor trustee and a local insurance agent. Black paid an annual premium to Hughes to keep this bond, and Hughes passed the funds on to the insurance company. According to the indictment, the mail-fraud charge rested on a “premium notice and invoice” that Hughes sent Black in 2013 notifying him that the annual premium was due. The government presented this notice and invoice at trial, along with testimony from Hughes. In late February 2013, Hughes received the premium notice in the mail from the insurance company. The notice included the amount that Black owed to renew his bond for the period from May 2013 to May 2014. Hughes then created an invoice for that amount and mailed it to Black with the premium notice. Black wrote a check for the premium on April 1. This evidence would allow a rational jury to find the use-of-the-mails element met because the mailing of the premium notice and invoice was sufficiently connected to Black and to his fraud. To begin with, the jury could have found that Black “caused” the bond mailings by enlisting the insurance company and Hughes to get the bond. 18 U.S.C. § 1341. One could reasonably conclude 8 Nos. 19-5088/5374, United States v. Black that Black knew these mailings would “follow in the ordinary course of” that bond transaction. Ramer, 883 F.3d at 684 (quoting Frost, 125 F.3d at 354). The jury next could have found that this mailing was sufficiently connected to Black’s fraud scheme. One could reasonably view the bond as an “essential element” of that scheme. Pereira, 347 U.S. at 8. Hughes testified that Black “could not” “have served as trustee without this bond,” which was designed to guarantee that Black would “faithfully perform his duties[.]” In other words, Black would not have had access to the Trust’s money that he misused without the bond. Documents from the probate court and testimony from its clerk confirmed this fact. The mailing also could reasonably be viewed as “incident to” this essential bond element. Id. It furthered the fraud by notifying Black of the premium necessary to renew the bond and maintain access to the Trust’s money. See Hartsel, 199 F.3d at 818. Black’s responses do not change this. He starts with a mistaken legal argument—that the sufficiency of the evidence concerning this element implicates the district court’s subject-matter jurisdiction. It does not. A federal statute gives district courts “original jurisdiction, exclusive of the courts of the States, of all offenses against the laws of the United States.” 18 U.S.C. § 3231. The government properly invokes this jurisdiction when it files an indictment charging a defendant with a violation of a federal criminal law, even if it later turns out the government lacks sufficient evidence for a conviction. Compare United States v. Stoddard, 875 F.2d 1233, 1236–37 (6th Cir. 1989), with id. at 1238–39. And a claim that the government failed to prove an element of the crime—like the use-of-the mails element in Black’s case—raises a merits challenge, not a jurisdictional one. See United States v. Stone, 762 F. App’x 315, 320–21 (6th Cir. 2019); United States v. Bacon, 884 F.3d 605, 608–09 (6th Cir. 2018). 9 Nos. 19-5088/5374, United States v. Black Turning to the merits, Black argues that the government failed to prove that he mailed his premium payment to Hughes because he testified that he would usually deliver those payments by hand. True or not, this fact does not help him. The government charged Black in a different mailfraud count with mailing the April 1 payment back to Hughes. But the jury acquitted him on that count. It convicted Black on the count involving Hughes’s mailing of the notice and invoice. So the manner in which Black returned the premium payment to Hughes does not matter. Black next argues that the mailing for his bond was “not fraudulent.” Apt. Br. 15. That fact does not help him either. Even if a mailing is “innocent,” Frost, 125 F.3d at 354 (citation omitted), it can support a mail-fraud conviction. The statute does not require the mailing to “be unlawful when viewed in isolation.” Ramer, 883 F.3d at 684; Schmuck, 489 U.S. at 714–15. Black lastly compares his case to Hartsel, suggesting that the premium notice and invoice were like the bank statements in that case. See 199 F.3d at 816–18. In neither case, Black says, did the mailing facilitate the fraud. Yet the problem in Hartsel was the lack of evidence that the defendant used the bank statements in any way to manage the bank account. Id. Here, however, the premium notice and invoice were effectively a bill, not just a summary of an account. A rational jury could conclude that the notice and invoice reminded Black that he must pay the premium, and so facilitated the fraud by helping him keep the bond that he needed to control the Trust’s money. Confirming this point, Hughes noted that all of the bond-related documents that he testified about, including the premium notice and invoice, were necessary for processing and renewing the bond. 10 Nos. 19-5088/5374, United States v. Black 2. Wire fraud. The wire-fraud statute consists of a similar (and similarly long) sentence: Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. 18 U.S.C. § 1343. Given the similar language in the mail-fraud and wire-fraud statutes, we have long recognized that wire fraud “has essentially the same elements” as mail fraud except that it requires the use of a wire rather than the use of the mails. United States v. Olive, 804 F.3d 747, 753 (6th Cir. 2015); see United States v. Kennedy, 714 F.3d 951, 958 (6th Cir. 2013); United States v. Bibby, 752 F.2d 1116, 1125–26 (6th Cir. 1985). As with his mail-fraud conviction, Black challenges the sufficiency of the evidence only for this use-of-a-wire element. Yet a rational jury could have found this element met for the same reasons it could have found the use-of-the-mails element met. According to the indictment, the transfers supporting Black’s wire-fraud convictions were two transfers of funds (one in 2012 and one in 2013) from the bank account belonging to Hughes’s insurance agency to the bank account belonging to the Michigan insurance company. Hughes testified that the transfers were payments for Black’s bond. One could reasonably find that Black “cause[d]” these transfers by buying the bond and paying the premium. 18 U.S.C. § 1343; Ramer, 883 F.3d at 684. And one could reasonably find that they were “incident to an essential part” of Black’s scheme because they paid for the bond that gave him access to the Trust’s funds. Pereira, 347 U.S. at 8. In response, Black again says that the wire transfers were “not fraudulent.” But just as the use of the mails need not be fraudulent, Frost, 125 F.3d at 354, so too the use of the wires need not be. As noted, we have interpreted the two statutes in the same way. See Olive, 804 F.3d at 753. Black also re-raises his analogy to the bank statements in Hartsel. Unlike with the bank 11 Nos. 19-5088/5374, United States v. Black statements in that case, however, a rational jury could conclude that the wire transfers aided the scheme. Hartsel, 199 F.3d at 818.