Court Opinion

ID: 2724115
Source: CourtListenerOpinion
Date Created: 2014-09-05 21:00:36.423188+00
Date Added: 2024-06-11T15:40:13.464474
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                 SEP 05 2014

                                                                           MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                        No. 12-50152

              Plaintiff - Appellee,              D.C. No. 8:09-cr-00180-AHM-1

  v.
                                                 MEMORANDUM*
EDWARD LANTZ FERGUSON,

              Defendant - Appellant.

                   Appeal from the United States District Court
                       for the Central District of California
                    A. Howard Matz, District Judge, Presiding

                       Argued and Submitted August 7, 2014
                               Pasadena, California

Before: WARDLAW, CALLAHAN, and M. SMITH, Circuit Judges.

                                         I.

       Edward Ferguson (“Ferguson”) challenges his conviction for two counts of

mail fraud in violation of 18 U.S.C. § 1341, alleging insufficiency of evidence. He

argues that the mailings that formed the basis of his conviction were (1) sent after

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
he had received victim-investors’ funds and thus were not part of an ongoing

scheme, and (2) do not qualify as “lulling” letters because they caused panic.

      We affirm because, taking the evidence presented at trial in the light most

favorable to the government, United States v. Nevils, 598 F.3d 1158, 1163-64 (9th

Cir. 2010), a rational trier of fact could have found that the letters in question were

“lulling” letters, or that they were part of an ongoing scheme, or both.1 See United

States v. Manarite, 44 F.3d 1407, 1411-12 (9th Cir. 1995).

                                          II.

      To secure a conviction for mail fraud, the government must prove that the

defendant: (1) devised or intended to devise a scheme to defraud or to perform

specified fraudulent acts; and (2) used the mail “for the purpose of executing, or

attempting to execute, the scheme (or specified fraudulent acts).” United States v.

Phillips, 704 F.3d 754, 762 (9th Cir. 2012) (quoting Carter v. United States, 530
U.S. 255, 261 (2000)). Circumstantial evidence may be a sufficient basis for

proving specific intent to defraud at the time of the mailings. See United States v.

Sullivan, 522 F.3d 967, 975 (9th Cir. 2008). The Supreme Court has held that

letters mailed after receipt of money by defrauders may be in furtherance of the

      1
             Because the parties are familiar with the facts and procedural history,
we recite them here only to the extent necessary to explain our decision.

                                           2
fraudulent scheme in two instances: a “lulling scheme” and an “ongoing scheme.”

Manarite, 44 F.3d at 1412.

      A. Lulling. In a lulling scheme,

      subsequent mailings are “designed to lull the victims into a false sense of
      security, postpone their ultimate complaint to the authorities, and therefore
      make the apprehension of the defendants less likely.” “In such a scheme, the
      mailing reassures the victim that all is well, discouraging him from
      investigating and uncovering the fraud.”

Id. (internal citations omitted); see also United States v. Jones, 712 F.2d 1316,

1321 (9th Cir. 1983) (same).

      Viewed in the light most favorable to the prosecution, Phillips, 704 F.3d at

757, a rational juror could have concluded, based on the evidence presented at trial,

that the letters were lulling letters because they were intended to reassure victims

that neither their principal nor their previously accrued interest earnings were in

jeopardy.

      It is irrelevant, despite what Ferguson suggests, that rather than calming

investors the letters caused distress; what is relevant is Ferguson’s intent. See

Schmuck v. United States, 489 U.S. 705, 715 (1989); see also United States v.

Rude, 88 F.3d 1538, 1547 (9th Cir. 1996) (“the mail and wire fraud statutes do not

proscribe only successful schemes.” (emphasis in original)). A rational juror could

have easily concluded that while it may have been the November letter that first

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alerted some investors to the “freezing” of their assets, Ferguson’s investors would

inevitably have panicked when their “interest” payments ceased and they learned

that they could not withdraw their principal. In short, the letters were intended to

quell inevitable disgruntlement, and to stop investors from going to authorities – a

goal they achieved for a time. Accordingly, the letters fit neatly into the definition

of “lulling letters” as laid out by Schmuck, Manarite and Jones, supra.

      B. Ongoing scheme. In addition to an intent to lull and avoid or delay

detection, a rational juror could have concluded that the letters were part of an

ongoing scheme, and that Ferguson intended to solicit more funds. The letters

encouraged investors to invest more money in funds that would be made available

in the future. See Manarite, 44 F.3d at 1413 (mailings may also be part of an

ongoing scheme where the fraudster was attempting to facilitate additional

transactions).

      The evidence demonstrates that Ferguson’s scheme was not planned with a

fixed start and end point. As we have previously explained:

      [a]llowance must be made for the reality that embezzlements and other
      schemes to defraud are often open-ended, opportunistic enterprises. They
      may evolve over time, contemplate no fixed end date or adapt to changed
      circumstances. . . . [I]t would be overly restrictive to look only at the scope
      of the plan as it was originally conceived.

                                              4
United States v. Tanke, 743 F.3d 1296, 1305 (9th Cir. 2014). Here, it was

reasonable for jurors to see the letters as part of Ferguson’s evolving plan.

      AFFIRMED.

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