Court Opinion

ID: 993596
Source: CourtListenerOpinion
Date Created: 2013-07-04 00:10:05.85972+00
Date Added: 2024-06-11T11:15:43.570397
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA,
Plaintiff-Appellee,

v.                               No. 97-4133

JOHN S. HOLTZCLAW,
Defendant-Appellant.

UNITED STATES OF AMERICA,
Plaintiff-Appellee,

v.                               No. 97-4134

JOYCE MORFEY,
Defendant-Appellant.

UNITED STATES OF AMERICA,
Plaintiff-Appellee,

v.                               No. 97-4135

JOYCE MORFEY,
Defendant-Appellant.

UNITED STATES OF AMERICA,
Plaintiff-Appellee,

v.                               No. 97-4136

JOHN S. HOLTZCLAW,
Defendant-Appellant.
UNITED STATES OF AMERICA,
Plaintiff-Appellee,

v.                                                                     No. 97-4166

DONALD L. ESTES,
Defendant-Appellant.

UNITED STATES OF AMERICA,
Plaintiff-Appellee,

v.                                                                     No. 97-4167

JERRY L. HORN,
Defendant-Appellant.

Appeals from the United States District Court
for the Southern District of West Virginia, at Huntington.
Joseph Robert Goodwin, District Judge.
(CR-96-27, CR-96-22)

Argued: October 3, 1997

Decided: November 26, 1997

Before RUSSELL and LUTTIG, Circuit Judges, and
BUTZNER, Senior Circuit Judge.

_________________________________________________________________

Affirmed in part and vacated in part by unpublished per curiam opin-
ion.

_________________________________________________________________

COUNSEL

ARGUED: Robert Clarke VanDervort, PAYNE, LOEB & RAY,
Charleston, West Virginia; David Austin Tapp, Somerset, Kentucky,

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for Appellants. Philip Henry Wright, Assistant United States Attor-
ney, Charleston, West Virginia, for Appellee. ON BRIEF: Edward H.
Weis, First Assistant Federal Public Defender, Charleston, West Vir-
ginia, for Appellant Estes; Gregory J. Campbell, CAMPBELL &
TURKELY, Charleston, West Virginia, for Appellant Horn. Rebecca
A. Betts, United States Attorney, Charleston, West Virginia, for
Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

In February 1991, John Holtzclaw, Donald Estes, Joyce Morfey,
and Jerry Horn ("the Appellants") traveled to Matewan, West Virginia
and convinced the First Assembly of God ("the Church") to invest
$198,000 in a "pyramid scheme."1 The Church lost its money and a
criminal investigation resulted in two indictments. The jury convicted
each Appellant of securities fraud in violation of 15 U.S.C. §§ 78j(b)
& 78(ff), and 17 C.F.R. § 240.10b-5; conspiracy to transport in inter-
state commerce securities and money taken by fraud in violation of
18 U.S.C. § 371; and interstate transportation of money taken by
fraud in violation of 18 U.S.C. § 2314. The jury convicted Holtzclaw
of two additional counts under 18 U.S.C. § 2314,2 three counts of
money laundering in violation of 18 U.S.C. § 1957, and three counts
of perjury before the grand jury in violation of 18 U.S.C. § 1623.
Morfey was also convicted of perjury before the grand jury.
_________________________________________________________________

1 The details of the scheme are set forth in United States v. Holtzclaw,
950 F. Supp. 1306, 1308-12 (S.D. W.Va. 1997).
2 Holtzclaw was convicted of additionally defrauding two church mem-
bers, Gerald Epling and Brenda Justice, of $38,000 and $10,000 respec-
tively.

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After trial, each Appellant filed motions for judgment of acquittal
and/or for a new trial. In United States v. Holtzclaw, 950 F. Supp.
1306 (S.D. W.Va. 1997), the district court granted their motions for
judgment of acquittal on the securities fraud count. The district court
contemporaneously granted Holtzclaw's motion for a new trial on two
of the perjury counts. All other post-trial motions were denied. Holtz-
claw, Estes, Morfey, and Horn appeal their convictions on various
grounds. We affirm in part and vacate in part.

I.

A.

The Appellants assert that the district court erred in denying their
motions for judgments of acquittal for their convictions under U.S.C.
§§ 371 and 2314 because the evidence at trial was insufficient to
prove they engaged in a scheme to defraud the Church. We must
uphold the jury verdict if, taking the view most favorable to the gov-
ernment, there is substantial evidence to support the findings of guilt.3
The relevant question is whether any rational trier of fact could have
found the defendants guilty beyond a reasonable doubt.4

We believe the government presented sufficient evidence against
the Appellants to sustain their convictions. Evidence was presented
that through a series of phone calls, Holtzclaw, Estes, and Horn mis-
represented the pyramid scheme as an "investment," when in fact, the
scheme required active selling by the participants. Horn went as far
as comparing the safety of the investment to the value of gold coins.
Additionally, each Appellant remained silent while the Church was
told the investment was risk-free. A review of the record thus demon-
strates that there was substantial evidence from which a rational juror
could have found the Appellants guilty beyond a reasonable doubt of
violating 18 U.S.C. §§ 371 and 2314.
_________________________________________________________________

3 See United States v. Jackson, 863 F.2d 1168, 1173 (4th Cir. 1989).

4 See id.

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B.

Holtzclaw additionally contends that the evidence was insufficient
to prove he defrauded two church members, Gerald Epling and
Brenda Justice, in violation of 18 U.S.C. § 2314. Based on the district
court's reasoning, we hold this argument meritless.

II.

The Appellants challenge the district court's refusal to instruct the
jury that justifiable reliance was an element of fraud under 18 U.S.C.
§ 2314. We review the district court's refusal to give a jury instruc-
tion for abuse of discretion.5 A district court's refusal to give a
requested instruction constitutes reversible error only if the instruc-
tion: (1) was correct; (2) was not substantially covered by the court's
charge to the jury; and (3) dealt with some point in the trial so impor-
tant, that failure to give the requested instruction seriously impaired
the defendant's ability to conduct his defense. 6

Section 2314 punishes those who "having devised or intend[ed] to
devise any scheme or artifice to defraud . . . transports or causes to
be transported . . . in the execution . . . of a scheme . . . money or
property having a value of $5000 or more."7 While reliance may be
an essential element of common law fraud, it is not an essential ele-
ment under § 2314.8 The only issue is whether there is a scheme or
artifice intended to defraud. Accordingly, we find the district court
did not abuse its discretion in refusing to give a jury instruction on
justifiable reliance.
_________________________________________________________________
5 See United States v. Russell, 971 F.2d 1098, 1107 (4th Cir. 1992).
6 See United States v. Lewis, 53 F.3d 29, 32 (4th Cir. 1995) (citations
omitted).
7 18 U.S.C. § 2314 (1994).
8 See also Chisholm v. Transouth Fin. Corp., 95 F.3d 331, 336 (4th Cir.
1996) (stating that "[a]lthough the crime of common law fraud requires
the intended victim to have justifiably and detrimentally relied on the
defendant's misrepresentation, no such `reliance' element must be
proved to obtain a conviction for mail fraud"); United States v. Bonnette,
663 F.2d 495, 498 (4th Cir. 1981) (holding that reliance is not an essen-
tial element of bank fraud under 18 U.S.C. § 1014).

                    5
III.

Holtzclaw contends the district court improperly concluded that his
three money laundering charges were not multiplicitous. A legal
determination whether charges in an indictment are multiplicitous is
reviewed de novo.9

The money laundering statute at issue, 18 U.S.C.§ 1957, provides
in pertinent part:

         (a) [w]hoever . . . knowingly engages or attempts to engage
         in a monetary transaction in criminally derived property that
         is of a value greater than $10,000 and is derived from speci-
         fied unlawful activity shall be punished . . . .

         (f)(1) the term "monetary transaction" means the deposit,
         withdrawal, transfer or exchange . . . of funds or a monetary
         instrument . . . by, through, or to a financial institution
         ....

Holtzclaw contends the three money laundering counts under which
he was convicted were multiplicitous because they were based upon
transfers of the same criminally derived property. We disagree.

Multiplicity is the charging of a single offense in several counts,
and may create the danger of multiple sentences for the same offense.10
However, multiplicity does not exist when, as here, each charge
involves proof of a fact the others did not require. 11 The three money
laundering counts in this case involved separate, discrete monetary
transactions. One involved the withdrawal of a check, another
involved the deposit of a different check, and the third involved a sep-
arate withdrawal three days after the previous transactions. Accord-
ingly, we find no error in the district court's determination.
_________________________________________________________________
9 See United States v. Hall, 972 F.2d 67, 69 (4th Cir. 1992) (noting that
interpretation of a statute is a purely legal question calling for de novo
review).
10 See United States v. Burns, 990 F.2d 1426, 1438 (4th Cir. 1993).

11 See Blockburger v. United States, 284 U.S. 299, 304 (1932).

                    6
IV.

The district court ordered Holtzclaw and Estes to pay restitution for
fraud they committed against David Eads. Evidence concerning this
fraud was admitted under Fed. R. Evid. 404(b) to show intent, lack
of mistake, etc., and not as evidence of the "pyramid scheme" against
the Church. The fraud against Eads was independent of the "pyramid
scheme" and was not alleged in the indictments. The government
acknowledges that it erred in seeking this restitution, and therefore,
we vacate this portion of the district court's order.

V.

Having carefully reviewed the records, briefs, and contentions of
the parties at oral argument, we can find no further error in the district
court opinion. We therefore affirm the remaining decisions of the dis-
trict court on the opinion of that court.

AFFIRMED IN PART, VACATED IN PART

                     7