Court Opinion

ID: 175962
Source: CourtListenerOpinion
Date Created: 2010-09-27 16:41:21+00
Date Added: 2024-06-11T17:25:37.445298
License: Public Domain

NOT PRECEDENTIAL

        UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

                                      No. 08-2549

                           UNITED STATES OF AMERICA

                                           v.

                                   JOHN J. KELLER,
                                             Appellant

                    On Appeal from the United States District Court
                       for the Eastern District of Pennsylvania
                          (D.C. Civil No. 2-07-00051-001)
                       District Judge: Hon. Thomas M. Golden

                               Argued September 14, 2010

               Before: SLOVITER, BARRY and SMITH, Circuit Judges

                               (Filed: September 27, 2010)

Philip D. Lauer (Argued)
Lauer, Paglianite & Sletvold
Easton, PA 18042

      Attorney for Appellant

Seth Weber
Robert A. Zauzmer (Argued)
Office of United States Attorney
Philadelphia, PA l9l06

      Attorneys for Appellee
                                          ______

                                         OPINION
                                          ______

SLOVITER, Circuit Judge.

       Appellant John Keller (“Keller”) appeals his convictions for wire fraud and the

sentence he received from the District Court, arguing foremost that the evidence was

insufficient to show that he caused an interstate wire communication or that any such

communication was sufficiently connected to his scheme to defraud.

                                            I.

       In August 2001, Keller, a lawyer, undertook to represent Tanya Slavinsky in

connection with the sale of her mother’s house. Keller charged Slavinsky $27,000 for

his services, which she paid in full. Keller placed $300,000 of the proceeds from the sale

of the home in an Interest on Lawyers’ Trust Account (“IOLTA Account”) at a PNC

Bank located in Pennsylvania on Slavinsky’s behalf. Keller later withdrew $75,000 from

that account and gave it to Slavinsky.

       Despite repeated assurances by Keller that he could not spend the money without

her consent, over the course of two years Keller, unbeknown to Slavinsky, wrote dozens

of checks from the IOLTA account and deposited them in his firm’s account, held at

what is now Wachovia Bank, also in Pennsylvania. Keller used the money to pay his

own expenses and those of his law firm.

                                            2
       In 2007, Keller was indicted on seventeen counts of wire fraud in violation of 18

U.S.C. § 1343, as part of a scheme “to steal approximately $225,000 from [Slavinsky] by

making unauthorized disbursements of money from his IOLTA account for personal and

business expenses.” App. at 46 The jury found Keller not guilty of the first five counts,

but convicted him of the other twelve. During sentencing, the District Court found that

Keller was responsible for a $225,000 loss to Slavinsky, which added twelve levels to the

guidelines calculation. The District Court sentenced him to fifty-seven months of

imprisonment on each count to run concurrently, and mandated $225,000 in restitution

payable to Slavinsky.

       Keller moved for acquittal and/or for a new trial on the grounds that there was

insufficient evidence on which to convict, the jury instructions were deficient, and the

District Court erred in the loss calculation at sentencing. The District Court rejected his

arguments and Keller timely appealed.1

                                            II.

       When the sufficiency of the evidence is challenged, we view the evidence in a

light most favorable to the Government and must sustain the jury’s verdict if there is

substantial evidence to support it. United States v. Antico, 275 F.3d 245, 260 (3d Cir.

2001). We agree with the District Court that, based on the evidence presented at trial, a

                   1
                     The District Court had jurisdiction over Keller’s claims
            under 18 U.S.C. § 3231. We have appellate jurisdiction over the
            final decision of the District Court under 28 U.S.C. § 1291.

                                             3
reasonable jury could have found beyond a reasonable doubt the essential elements of

wire fraud: (1) the defendant’s knowing and willful participation in a scheme or artifice

to defraud, (2) with the specific intent to defraud, and (3) the use, or cause of use, of

interstate wire communications in furtherance of the scheme.2 Id. at 261. Keller only

challenges the District Court’s finding as to the third element, which has two prongs.

       With respect to the first prong, causation, we have held that “‘[w]here 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 actually

intended, then he ‘causes’ the mails to be used.’”3 United States v. Bentz, 21 F.3d 37, 40

(3d Cir. 1994) (internal citations omitted). Keller need not have known or reasonably

foreseen the interstate nature of the wire transmissions, but solely that wire transmissions

                    2
                        In relevant part, the wire fraud statute provides:

                    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 . . . [uses wires, or causes their use, in interstate
                    commerce] 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.
                    3
                      The analysis from mail fraud cases is transferrable to wire
             fraud cases. See United States v. Morelli, 169 F.3d 798, 806 n.9
             (3d Cir. 1999) (“the wire fraud and mail fraud statutes differ only
             in form, not in substance, and cases . . . interpreting one govern the
             other as well”).

                                                4
would occur. See, e.g., United States v. Blassingame, 427 F.2d 329, 330 (2d Cir. 1970)

(“statute does not condition guilt upon knowing that interstate communication is used”),

cited with approval in United States v. Iannelli, 477 F.2d 999, 1002 (3d Cir. 1973).

During oral argument, Keller conceded that the use of wire communications in clearing

the transfer of checks was reasonably foreseeable. We agree.

       To satisfy the second prong, that the wire communications be in furtherance of the

fraud, “the use of the [wires] need not be an essential element of the scheme,” but rather,

“[i]t is sufficient for [the use of the wires] to be incident to an essential part of the

scheme, or a step in the plot.” Schmuck v. United States, 489 U.S. 705, 710-11 (1989)

(internal citations, quotations, and brackets omitted). To complete the settlement process

between the banks, the daily aggregated data from PNC and Wachovia was transmitted

electronically from the respective Pennsylvania bank to the Clearing House Company

(“SVPCO”) in New York and vice versa. The District Court found that the repeated

interstate clearing of checks, as part of an on-going scheme to defraud Slavinsky of the

full $225,000 held in the IOLTA account, satisfies the use of wires element of federal

wire fraud. We agree.

       The District Court distinguished Kann v. United States, 323 U.S. 88 (1944),

which involved a one-time cashing of a check where the mails were used by the bank

after the defendants had already received the cash. The District Court found that, like the

Supreme Court’s decision in Schmuck where the fraud depended on the continued

                                                5
clearing of title of doctored cars, Keller’s scheme “hinged on the continued clearing of

his checks . . . .” App. at 15. If any of the checks failed to clear, the funds would not be

transferred and Keller’s scheme would fail. See also Pereira v. United States, 347 U.S.

1, 8 (1954) (interstate clearing of check held to be incident to an essential part of the

scheme); United States v. Tiller, 302 F.3d 98, 103 (3d Cir. 2002) (mailing element met in

on-going fraud where defendant submitted several false claims to obtain bonuses for

work she never actually performed, and employer later mailed invoices to third-party

administrator for payment).

       As the Government’s brief states, even if Keller’s account was credited

immediately upon depositing any given check, if the clearing process ultimately failed,

his account would be debited and “the fraud would be for naught.” Appellee’s Br. at 20.

See United States v. Franks, 309 F.3d 977, 978 (7th Cir. 2002) (distinguishing Kann

because it predates the introduction of the Uniform Commercial Code, “which makes it

easy for a customer’s bank to reverse the credit if the instrument cannot be collected”).

The Government presented undisputed evidence connecting the specific checks charged

in the indictment to the clearance process. Accordingly, Keller has failed to demonstrate

that the District Court erred on this point.

       Moreover, we find that the District Court did not abuse its discretion when it

                                               6
refused to give Keller’s proposed jury instruction.4 We agree with the District Court that

Keller’s proposed instruction, that the scheme to defraud must have “depended in some

way” on the use of the wires, provides no meaningful difference from the instruction the

District Court gave that the wires must have been “used in some manner to further” the

scheme. App. at 17 (internal quotations omitted). The District Court gave, verbatim, the

Third Circuit Model Criminal Jury Instruction 6.18.1343-1 for wire fraud, which Keller

conceded during the proceedings provided a correct statement of the law.

       Finally, given the lack of a record quantifying the value of unpaid legal services

provided by Keller to Slavinsky after the sale, if any, it was not error for the District

Court to assign nothing for the loss reduction for services.5 The loss need not be

determined with precision and the District Court need only make a reasonable estimate of

the loss. United States v. Coyle, 63 F.3d 1239, 1251 (3d Cir. 1995) (internal citations

                    4
                      We review the District Court’s decision regarding jury
             instructions for abuse of discretion and “will order a new trial on
             account of a district court’s refusal to give a proposed jury
             instruction ‘only when the requested instruction was correct, not
             substantially covered by the instructions given, and was so
             consequential that the refusal to give the instruction was prejudicial
             to the defendant.’” United States v. Hoffecker, 530 F.3d 137, 167
             (3d Cir. 2008) (internal citations omitted).
                    5
                      We review factual findings, such as the amount of loss, for
             clear error. United States v. Napier, 273 F.3d 276, 278 (3d Cir.
             2001).

                                               7
and quotations omitted).6

                                           III.

      For the foregoing reasons, we will affirm the judgment of the District Court.

                   6
                    Keller’s additional argument is without merit. The District
            Court did not err by considering loss from uncharged and acquitted
            conduct. See, e.g., United States v. Rudolph, 137 F.3d 173, 177 (3d
            Cir. 1998) (uncharged conduct may form the basis for upward or
            downward sentencing adjustments); United States v. Jimenez, 513
            F.3d 62, 88 (3d Cir. 2008) (district court can consider acquitted
            conduct when establishing a sentence).

                                             8