Legal Document

414 U.S. 395 94 Supreme Court Reporter 645 38 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 603 UNITED STATES, Petitioner,v.Thomas E. MAZE. Number 72—1168. Argued Nov. 13 and 14, 1973. Decided Jan. 8, 1974. Syllabus Respondent was convicted of violating the federal mail fraud statute, 18 Code KF62 § 1341, by devising a scheme to defraud through unlawfully obtaining possession from one Meredith credit card issued Louisville bank, which respondent used obtain goods services motel operators in various knowing that whom he presented for payment would sales slips turn them Meredith. Section 1341 makes it crime, inter alia, person who has devised or money property means false pretenses purpose executing knowingly cause be delivered according direction thereon any thing Postal Service. The Appeals reversed judgment conviction on ground inapplicable respondent's conduct. Held: mailings were not sufficiently closely related bring his conduct within statute. Though directed adjusting accounts between victims (the motels, Meredith), they embraced statute since had already reached fruition when checked out did depend ultimately bore loss. Pereira versus States, 347 1, 74 358, 98 L.Ed. 435; Sampson, 371 75, 83 173, 9 136, distinguished. Pp. 398—405. 468 Federal Reporter, 2nd 529, affirmed. Jewell S. Lafontant, Washington, D.C., petitioner. William T. Warner, Louisville, Ky., respondent. Mr. Justice REHNQUIST opinion Court. 1 In February 1971 Thomas Maze moved Kentucky, there shared an apartment with Charles L. spring year fancy lightly turned thoughts sunny Southland, thereupon took Meredith's BankAmericard 1968 automobile headed Southern California. By presenting signing name, obtained food lodging at motels located California, Florida, Louisiana. Each these establishments transmitted Citizens Fidelity Bank & Trust company Meredith, invoices representing furnished meanwhile, day after departure notified bank been stolen. 2 Upon return indicted four counts violation count Dyer Act, 2312. indictment charged several merchants different using services. specified himself knew each merchant purchases payment. also delay this mailing enable continue purchasing appreciable period time. 3 tried jury District Western Kentucky. At trial, representatives identified transactions forwarded their motels. An official testified all those received due course mail, customary method bank. found guilty as counts, appealed Sixth Circuit. That court but affirmed Act. 529 (1972).1 Because apparent conflict among courts appeals circumstances under fraudulent use may violate statute,2 we granted Government's petition certiorari. 411 963, 93 2145, 36 683 (1973). For reasons stated below, affirm Appeals. 4 applicable parts provide follows:3 5 'Whoever, having intending devise artifice defraud, pretenses, representations, promises . such attempting so do causes thereon, place is addressed, (matter whatever sent Service) shall fined more than $1,000 imprisoned five years, both.' 1341. 6 8—9, 363, 435 (1954), held 'causes' mails where 'does act knowledge will follow ordinary business, can reasonably foreseen, even though actually intended ..' We assume, Appeals, evidence support finding 'caused' signed out-of-state But difficult question whether statute.4 7 Under must 'for scheme, requires,' Kann 323 88, 94, 65 148, 151, 89 88 (1944), '(i)t necessary contemplate essential element,' supra, 362. Government relies Pereira, 136 (1962), its position, while Parr 363 370, 80 1171, 1277 (1960). 8 Kann, corporate officers directors accused set up dummy corporation divert profits own use. As part defendants fraudulently checks payable cashed deposited then mailed collection drawee This completed point checks: 'The case fruition. persons receive irrevocably. It immaterial them, consummation how paid credited check collect cannot said requires.' 151. 10 charged, gasoline other products purposes unauthorized school district employed them. oil payment, district's made mail. Relying again sufficient connection execution defendants' because went about collecting 11 defendant defrauded wealthy widow her marrying her. describes words: 12 'Pereira asked wife if she join him hotel venture advance $35,000 toward purchase price $78,000. She agreed. agreed, sell some securities possessed Los Angeles, choosing El Paso. On June 15, National Angeles brokers gave endorsed State cleared, 18, cashier's drawn favor Pereira.' U.S., 5, S.Ct., 361. Thus played significant enabling acquire dominion over $35,000, absconded.5 Unlike here end proprietor, greater lesser degree scheme. Respondent's motel, no indication success depended way loss.6 Indeed, view, probably have preferred misplaced personnel never all. 14 Government, however, relying argues credit-card 'delay' caused 'which aids perpetrator continuation postponement detection.' employees nationwide businessmen fees promise either help loans businesses. Even defendants, plan called accepted application together form letter assuring contracted performed. preclude 'a deliberate, planned victims' obtained.' 80, 176. 15 believe Sampson sustains position. subsequent designed lull into sense security, postpone ultimate complaint authorities, therefore make apprehension less likely taken place. successful completion owners increased probability detected apprehended. There undoubtedly transmitting physical transmission business correspondence cities separated large distances. Mail service city another overcome effect distance separates places. distance, service,7 time lag correspondence.8 16 Congress only recently passed amendment Truth Lending Act9 criminal 'transaction affecting interstate foreign commerce.' 84 Statutes-at-Large 1127, 1644. could drafted require fact result scheme.10 this; instead, required Since purpose, 17 Affirmed. Chief BURGER, WHITE joins, dissenting. 19 N Dec. Immigration Nationality Decisions dissent follows add few observations aspect Court's holding seems importance. Title traditionally against activity first line defense. When 'new' develops—as constantly happens becomes stopgap device deal temporary basis new phenomenon, until particularized legislation developed directly evil. 'Prior passage 1933 (Securities) most prosecutions brought Fraud Statute.' Mathews, Criminal Prosecutions Securities Laws Related Statutes: Nature Development SEC Cases, 39 Geo.Wash.L.Rev. 901, 911 (1971). Loan sharks justice Lynch, Prosecuting Sharks Statute, Ford.L.Rev. 150 (1945), before Congress, 1968, recognized character loansharking need protection organized crime activity, enacted 891 et seq., outlawing extortionate extensions credit. Although inadequate protect buying investing public fully, stood breach frauds connected burgeoning sale undeveloped real estate, examine problems land industry pass law Interstate Land Sales Full Disclosure 82 590, 1701 seq. Coffey Welch, Regulation Sales: Comes Down Earth, 21 Case. W.Res.L.Rev. (1969). Similarly, stop fraud, particular passing 20 continues remain important tool prosecuting areas addressing fill pages indictments today. Geo.Wash.L.Rev., 911. Despite prevasive regulation drug industry, postal statutes still play role controlling solicitation mail-order distributors based upon misrepresentations. Hart, States: Their Use Abuse, Food Drug Cosm.L.J. 245, 247, 261 (1956). Maze's escapade—of are numberless counterparts demonstrates should dealing 1644 books. strong able cope varieties ever-inventive American 'con artist' sure develop. Abuses franchising growing scandals pyramid schemes threats financial security our citizenry ever alert combat. Comment, Multi-Level Pyramid Systems: Free Enterprise, S.D.L.Rev. 358 22 decision viewed limited narrow facts adventures places heavy reliance, seeming desire flood multitude relatively minor acts misrepresentation considered appropriately States. whose today affirmed, careful state '(w)e hold constitute statute.' 536 (C.A.6 1972). decision, then, correct erroneous, does mean ought, way, slacken prosecutorial efforts guileless members worthless securities, patent medicines, deeds arid inaccessible tracts land, empty instant wealth happiness. agree error reversed. 23 WHITE, THE CHIEF JUSTICE, BRENNAN, BLACKMUN concur, 24 Until causing separate stolen furtherance without authorization falsely securing credit—would offense punishable 1341.1 more. misreading prior decisions giving unambiguous unrealistic reading, majority beyond reach consummated used, utilizes central, instrumentality perpetration, demands investigatory resources effectively checked. subscribe majority's reasoning reaches, dissent. 25 'part defraud,' 'obtain(ing) of' 'by representations promises. .' App. 6. Company licensee, authorized holder user, concerns previously entered agreements furnish holders Id., indispensable activities: 26 'It further (the) charging credit, well copies recording be, were, Company, directions posting account invoices, bill accumulated charges, subsequently normal Meredith; inherent detected.' 6—7. 27 * proscribes executing' trial instructed convict found, 'the carry foreseeable. matter disclose face representation assist carrying defraud.' 37 (emphasis added). Viewing transaction exchange drafts, scheme.' 535 original). below acknowledged issuer holder,' nevertheless concluded relevant perspective respondent's. 'As far (respondent) concerned, complete motel; billing merely 'incidental collateral it." 534, quoting 95, (1944). 28 uncritically unnecessarily restrictive approach construing Like selectively seized language pursuit notion ended duped told, example deliver corporation, 'had fruition,' 'intended (goods services) irrevocably,' 'immaterial scheme' issuing holder, so-called process was, noted, it.' 'Therefore, fraud,' or, (74 435), 'incident scheme,' fall ban 390, 1183, 29 What overlooks salient case—and others involving cards—was practiced individual who, lodgings meals itself recognized, '(t)he honored insulated loss BankAmericard. See Brandel Leonard, Charge Cards: New Cash Credit, 69 Mich.L.Rev. 1033, 1040 (1971).' F.2d, 534 n. 3.2 Here, perpetrated merchant.3 thus became 'an element' (1954). 30 Nor part, very schemed card. legal standpoint certainly 31 'not last step continuing venture. crucial total project. justified chopping segments isolating others. warranted (only merchants). plain plans wider finally consummated.' 96, 152 (Douglas, J., dissenting). 32 card-issuing defrauded, II 33 contributed realization creating detecting necessarily results time-consuming processing Chasson, 451 Chason, 301, 303—304 (CA2), cert. denied, 405 1016, 92 1291, 479 During two-week, $2,000 transcontinental spending spree, full advantage inevitable unlawful activities. If instantaneous identification verification system, nipped bud. simple truth not. direct consequence prevailing practice system's attendant delays, buy valuable detection thereby execute 34 mysteriously ignores reaches 'cases concealment perpetrated.' 94—95, Hendrickson, 394 807 1968), denied 393 1031, 642, 574 (1969); Riedel, 126 81, (C.A.7 1942); Lowe, 115 596, 599 (C.A.7), 311 717, 61 441, 85 466 (1940). Moreover, fails take appropriate recent dismissed defraud. 35 'We unable find anything suggests laying down automatic rule Rather cases fully executed used. And rendered both followed view statutes.' (footnote omitted). indicated, making purloined detected. engaged enterprise nature short-lived. Every holder's receipt forged allows much longer. my established guilt reasonable doubt. III ramifications mere reversal lone conviction. era 'cashless' society, Americans increasingly resorting cards day-to-day consumer purchases. Today 300 million circulation, annual charges exceed $60 billion. 1969 alone, 1.5 lost stolen, resulting losses exceeding $100 million. Cong.Rec. 38987 Current estimates put high $200 Cleveland, Credit Issuers, Merchants, Users, 90 Banking L.J. 719, 729 majority, $5,000 covered subject jurisdiction. Yet evidenced case, recognize artificial boundaries. future, prosecuted transpired. example, now Louisiana, Florida. result, precipitate widespread inability apprehend and/or prosecute hijack system. determined Act conviction, concurrent five-year sentence, consider convictions well. jurisdictional barrier Benton Maryland, 784, 2056, 707 (1969), decided 'no considerations judicial economy efficiency urged us outweigh interest appellant opportunity clear record felony.' resolution questions appropriate. Tenth Circuit Lynn, 461 759 (1972), appears consistent case. Five apparently contrary view. E.g., Kellerman, 431 319 400 957, 91 356, 266 (1970); 301 (CA2 1971), (1972); Madison, 458 974 409 859, 145, 105 Ciotti, 469 1204 (CA3 1972), pending, 72—6155; Adams 312 137 (CA5 1963); Kloian 349 291 1965), 384 913, 86 1349, 365 (1966); Reynolds, 421 178 1970); Thomas, 429 407 Kelly, 467 262 (CA7 933, 1905, (1973); Kelem, 416 346 (CA9 1969), 397 952, 977, 134 (1970). text section reads follows: promises, sell, dispose of, loan, exchange, alter, give away, distribute, supply, procure counterfeit spurious coin, obligation, article, represented intimated do, post office depository matter, Service, takes receives therefrom, thing, indicates estimated $40 billion that, 1969, risen $20 1966 1969. Brief 2, citing (Dec. 12, 1969). 1872, chapter 335, 323, obviously such, general include requirements otherwise met. While clearly implied Paso immediately defendant, instead awaited advice check, Fifth abundantly clear: Texas California constitutes referred First Count .. back drawn, Paso, Texas, 'instructions wire fate', meaning item receiving telegram stating paid, $35,286.01, promptly 19, 1951.' 202 830, 836 (1953). WHITE's dissenting 'two-week, spree.' significance amounts respondent, note totaling $301.85. 2; 4—5. admonished judges ignore what know men, wish understood suggesting delays solely attributable involved. Service occasion something 20th century version wingfooted Mercury, remains Distance delay. noted system accomplished receipts one-month holder. 535. might argued facilities travel distances separating simply local enterprises Louisville. cast, terms travel, mails. Volume provides: commerce, uses counterfeit, fictitious, altered, forged, lost, services, both, retail value aggregating more, $10,000 felt enactment above manifested legislative excluded 'unless offender purposeful accomplish 536. contends believed 1970 otherwise. notes history original bill, Senate, contained amount limitation. Senate-House conferees, request Department Justice, later added limitation jurisdiction $5,000. 21. erred attaching amendment, urging provisions sole vehicle prosecution frauds. 33—37, Beacon Brass Co., 344 43, 45, 73 77, 78, 97 (1952). deem unnecessary determine conclude resort cover JUSTICE 'mail fraud' threaten citizenry' combat.' useful weapon combat evils broad language. engage initiative See, e.g., 479; 1963). recognizes least below. Ante, 398 2. relied (CA10 allege issuer. Almost systems presently operation country rely three-way issuer, cardholder, subscribing retailer. tripartite arrangement basically entails three contractual agreements: (1) cardholder; (2) banks merchant; (3) cardholder. generally Tripartite Card Transaction: A Legal Infant, 48 Calif.L.Rev. 459 many parties issues charge public. issuerbank establishes behalf issued, two enter agreement governs relationship. cardholder incur obligations cash merchant-members. 'These requiring honor member-bank, deposit evidencing cardholders checking discounted account. These cleared interchange member-bank originally billed periodically. decide period, free finance defer extra percentage billed.' Cards—Contemporary Problems, 41 Fordham L.Rev. 373, 374 (1972) relationship dictated respective agreements, contract distribution risk systems, certain exceptions negligence honors expired appearing current 'stop list' excess cardholder's line, assumes risks Murray, Legal-Empirical Study Unauthorized Cards, U.Miami 811, 813 (1967); Note, Distributing Loss, 77 Yale 1418, 1420 (1968); Triparties Transaction, Calif.L.Rev., 464—465. "As same position certified par, returned stopped, small discount bank's firm commitment willing accept freely good (and cash). "Under arrangements, risk, banking function performs, selects deal, cardholder-purchaser expect assume merchandise risk. division allocation permits hundreds thousands participating throughout abroad." 723—724 (1973), Statement Bankers Association, Consumers Interbank BankAmericard, Incorporated Trade Commission Revised Proposed Rule Preservation Consumers' Claims Defenses, 4—5 (Mar. 1973). 133(a) liability $50. 1126, 1643(a).

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