Court Opinion

ID: 9496890
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:38:11.517998+00
Date Added: 2024-06-11T17:57:52.430841
License: Public Domain

GWIN, District Judge,
concurring, in part and dissenting, in part.
While agreeing with the well-stated opinion of my colleagues on other issues, I respectfully dissent regarding their determination that venue did not lie in the Western District of Michigan under the mail fraud statute, 18 U.S.C. § 1341. In that district, the defendant, through collaborators, engaged in a large portion of the fraudulent activities involved with this case. Further, while I concur with the majority opinion’s denial of a motion for acquittal, I offer a somewhat different explanation why Defendant Wood’s transactions were sales or encumbrances and not “short sales against the box.” I begin by offering supplemental reasoning regarding Wood’s claim that he engaged in short sales against the box and that such transactions were neither a sale nor an encumbrance of any equities. I then turn to the majority’s finding that, in mail fraud prosecutions, venue lies in the district where the participants have mailed or delivered or through which materials passed but not within the district that was the focus of the fraudulent scheme.
I. Short Sales Against the Box
On appeal, Defendant Wood argues that, as a matter of law, a short sale against the box is neither a sale nor an encumbrance. First, the defendant argues that the jury instructions that describe a short sale against a box as a “sale” or an “encumbrance” were invalid. Second, the Defen*718dant argues that the evidence was insufficient to convict him because his activities could not be a sale or an encumbrance.
The majority finds the trial court’s instructions were balanced, neither suggesting nor rejecting that a short sale against the box could be an encumbrance or a sale. I agree with this finding, although I believe we should reject Wood’s argument for a more fundamental reason — he offered insufficient evidence to support a finding that the Graham and Miller transactions were short sales against the box transactions.
Long sales of securities occur when the owner of certain stocks sells them, delivers them, and consequently pays taxes on the profits. In short sales, an investor borrows stock, typically from his broker, and sells that stock in the hopes that he can later return the stock the investor had borrowed from the broker with stock purchased at a lower price. If the price of the security declines, the investor profits by the difference between the price at which he sold the stock and the price at which he later purchases the stock (minus any sales commissions and margin fees that his broker assesses). Short sales can also help customers avoid taxes. Short sale transactions close when the short seller returns an equal number of shares to the lender.
Short sales are risky. The short seller loses when the price of the security rises and the cost of covering the borrowed securities increases. Because no metaphysical cap exists on how high a security price can rise, losses continue to increase as the stock borrowed for the short sale gains value. The loss is theoretically unlimited. As a result, “[a] material misrepresentation concerning the risks of a short sale transaction ... can form the basis of a private suit under SEC Rule 10b-5.”1
Short sales “against the box” differ from short sales by attempting to reduce the risk associated with borrowing stocks and agreeing to replace the borrowed stocks. In these transactions, an investor already owns equities, but borrows (generally through a broker) an equal number of shares of the same class of stock to sell short in the open market. The investor posts the “long” (owned) shares as collateral. The broker then generally holds the shares in a safety deposit box — thus the name, “against the box.” The broker uses the shares from the box to complete the short sale only if the investor is unable or unwilling to return the borrowed stock.
Theoretically, those who invest “against the box” perfectly hedge against market risk. If the market price of the stock increases, this increases the value of their long (owned) shares. Yet, if the market price decreases, this increases the value of the short (borrowed) shares. While an investor will not profit from a short against the box transaction — since losses in the short or long transaction offset any gains in the other — such transactions can allow investors to liquidate stock without incurring taxes on the original sale.
Defendant Wood claims he did not defraud First Financial customers because securities taken from customers’ accounts were covered by an “in the box” transaction. With his argument, the Defendant turns the idea of a short sales against the box on its head. Most importantly, Wood’s argument fails because he never had any long shares “in the box” to cover the shares he borrowed in the short sale. Without permission, Defendant Wood sold securities that customers had pledged to secure loans the customers had received. At the time he sold the pledged securities, no evidence showed that he placed equiva*719lent securities “in the box,” as required for a short sale against the box.
Although he never covered the securities used, Wood tries to overcome this problem by arguing that he could have purchased shares to place “in the box” if his customers’ loans were repaid: “Once borrowers from First Financial had repaid their loans, First Financial had a pool of capital with which to purchase securities in the open market to close the short position, which would in turn free the borrower’s pledged securities from ‘the box’ and allow their return to the borrower.” (Def. br. at 12).
This argument fails. Most important, the presence of collateral to satisfy the short seller’s obligation to return the borrowed shares distinguishes an “in the box” transaction. Wood showed no evidence that he placed equivalent otherwise-unencumbered securities “into the box.” For example, the shorted security, Sonic Environmental Systems, was very thinly traded and not readily obtainable. In essence, Wood makes the argument that a transaction is a short sale against the box if funds are available to cover the borrowed security. If we accepted this argument, any trustee who absconded with securities could characterize any short sale as no sale. Even if Wood’s unsupportable argument were allowed, he loses for another simple reason. Wood showed no evidence that he dedicated funds to obtain replacement shares for the Sonic Environmental Systems shares he had shorted. The evidence showed that Wood used the Graham proceeds to cover the loan to the Millers. In addition, Wood offered no evidence that he maintained unencumbered assets of any kind that would allow the purchase of cover for the shorted stock.
Moreover, I am not convinced that it would make a difference even if Defendant Wood could show the transactions were short sales against the box. Even if his assertions are true, the Government could still convict him for fraudulent behavior.
The defendant argues that a short sale “against the box” does not encumber the stock posted or make up a sale as a matter of law. The defendant cites no authority for his assertion that a short sale against the box can never be a “sale” violating the Security and Pledge Agreement. Cf. Rubin v. United States, 449 U.S. 424, 429, 431, 101 S.Ct. 698, 66 L.Ed.2d 633 (1981) (expansively interpreting the words “sale” to hold that a pledge of stock as collateral for a loan is a “sale” under the Securities Act, even without a default on the loans).
The defendant goes on to assert that a short sale against the box never amounts to an encumbrance, citing Schreiber v. First Fin. Acceptance, 965 F.Supp. 397 (E.D.N.Y.1997). The Schreiber case also involved Defendant Wood. The Schreiber court found that “the question of encumbrance amounts to whether the defendants could have returned the securities to [plaintiff], at any given time, had [plaintiff] repaid the loan in full.” Id. at 400. The Schreiber court opined that short sales against the box do not encumber the stock if the defendant maintained “sufficient equity in the account” to satisfy margin requirements. Id. This holding confuses short sales with short sales against the box. While the former transactions depend upon margin requirements, the later transactions revolve around posted shares, not the availability of other assets that could be used to satisfy the obligation to cover the borrowed shares. Furthermore, the Eastern District of New York engaged in a unique definition of equity when it considered outstanding payments on Defendant Wood’s loan as collateral for the obligation to post securities. Id. This definition, which Defendant Wood urges the Court to adopt in the present case, is not persuasive.
*720Typically, to engage in a short sale, one must maintain a margin account related to the market value of the borrowed stock. Until Schreiber, speculative future earnings have never been considered part of posted equity for purposes of fulfilling margin requirements. Essentially, the Schreiber court redefines securities law with its anomalous view of an “encumbrance.” As a result, commentators have criticized Schreiber as “flagrantly wrong.” See, e.g., Kenneth C. Kettering, Repledge and Pre-Default Sale of Securities Collateral under Revised Article 9, 74 Chioago-KeNt L.Rev. 1109, n. 13 (1999) (“Schreiber seems flagrantly wrong and is explicable only on the supposition that the court had little patience with the suit because the secured party was in fact solvent.”).
Moreover, Schreiber breaks from the momentum of Supreme Court precedent. Recall that, in Rubin v. United States, 449 U.S. 424, 429, 431, 101 S.Ct. 698, 66 L.Ed.2d 633 (1981), the Supreme Court held that a pledge of stock as collateral for a loan is a “sale” under the Securities Act, even without a default on the loans. Extending this holding to conclude that a short sale against the box is an encumbrance of the stock would be logical.
Even if this court were to apply the questionable reasoning of Schreiber, the facts of the Graham loan would still amount to an encumbrance. The Schreiber court says that a defendant must be prepared to return the securities upon payment of the loan in full. Yet, Graham did repay his loan and Defendant Wood did not produce his 35,000 shares of Sonic stock that Graham had posted to secure the loan.
An analysis of the Miller case, under the common definition of margin requirements, also reveals an encumbrance. Wood sold the Millers’ Comerica stock on December 8, 1994, less than three months after the Millers pledged the stock to secure the loan to them. Defendant Wood did not maintain long shares of Comerica stock “in the box” nor did he post margin requirements. By the end of December 1994, all that remained in that brokerage account was $1,117. Because the price of stock can increase dramatically, the only way to insure an economically feasible purchase of stock to close a short sale is by posting margin requirements before-the-fact. This court would need to engage in pure fantasy to pretend that Wood did not encumber the Miller stock that Defendant Wood could magically come up with identical shares when the Millers repaid the loan. That the Comerica stock tripled in value by May 1996 and Wood failed to produce replacement Comerica stock drives this point home.
Ultimately, Defendant Wood argues that by considering a shoi-t sale against the box as an unlawful sale or encumbrance, the lower court allowed the jury to find that these types of transactions are illegal. Nevertheless, the jury instructions never say that a short sale against the box is per se an illegal transaction. The jury instructions explain that the jury cannot convict the Defendant apart from fraudulent behavior. Nothing in the jury instructions says that engaging in a short sale against the box, by itself, is fraudulent behavior. Rather, the Grand Jury charged Defendant Wood with knowingly deceiving investors about the status of their stock. The jury convicted the Defendant of fraud, not for engaging in short sales against the box, assuming we could so characterize his transactions. Summarizing, Wood fails to show that he ever posted covering shares for the stock that he sold short. Additionally, he fails to offer evidence that he had the resources to provide covering shares for the stock that he sold short. Having failed to give any evidence that his short sale of the pledged securities was covered, *721he cannot argue that there was no sale or encumbrance of the securities that Miller and Graham had pledged to secure their loans.
II. Venue
In a criminal case, the question of venue has not only pragmatic, but also constitutional implications. Article III requires that “[t]he Trial of all Crimes ... shall be held in the State where the said Crimes shall have been committed.” U.S. Const. art. Ill § 2 cl. 3. The Sixth Amendment takes this requirement a step further by requiring that the trial take place in the same district as that in which the crime was allegedly committed. U.S. Const. amend. VI. (“In all criminal prosecutions, the accused shall enjoy the right to ... trial, by an impartial jury of the State and district wherein the crime shall have been committed[.]”).2 Various federal statutes further define these provisions. See, e.g., Fed.R.Crim.P. 18 (“Except as otherwise permitted by statute or by these rules, the prosecution shall be had in a district in which the offense was committed.”); 18 U.S.C. § 3237, infra. Read as a whole, these provisions manifest a strong constitutional policy disfavoring trials removed from the situs of the alleged criminal activity.
A. Applicability of 18 U.S.C. § 3237(a)
The general venue provisions for continuing offenses are found at 18 U.S.C. § 3237. Section 3237(a) reads, in relevant part, “Any offense involving use of the mails ... is a continuing offense and ... may be ... prosecuted in any district from, through, or into which such ... mail matter ... moves.” The majority states that mail fraud is such a continuing offense. After referencing that provision, the majority finds that venue exists where mail related to the fraud “is deposited, received, or moves through, even if the fraud’s core was elsewhere.” Majority opinion at 713. I cannot agree.
Section 3237 has a limited application. The Supreme Court has long noted that § 3237 is inapplicable to statutes which contain their own specific venue provisions. See Travis v. United States, 364 U.S. 631, 636-37, 81 S.Ct. 358, 5 L.Ed.2d 340 (1961) (“[V]enue should not be made to depend upon the chance use of the mails, when Congress has so carefully indicated the locus of the crimes.”); see also United States v. Brennan, 183 F.3d 139, 147 (2d Cir.1999). Furthermore, the second paragraph of § 3237(a) broadly refers to offenses involving the “use of the mails.” Thus, any statutes which do not so broadly criminalize acts involving the “use of the mails” are not likely covered under § 3237. See infra.
In United States v. Brennan, 183 F.3d 139, the Second Circuit spoke to the applicability of § 3237 to the mail fraud statute. In Brennan, the government argued that venue was appropriate under § 3237(a) because mail had moved through the Eastern District of New York. The Second Circuit rejected this argument and found that § 3237(a) does not establish venue in mail fraud cases:
Defendants maintain ... that § 3237(a) does not apply to mail fraud prosecutions. Their argument rests on the contention that the mail fraud statute does *722not proscribe conduct involving “the use of the mails” within the meaning of § 3237(a). We agree. Though perhaps surprising, this conclusion is strongly supported by consideration of the history and purpose of § 3237(a) and the constitutional protection of defendants’ venue rights.
Id. at 146.
Examining the legislative history of § 3237(a), the Second Circuit found that this venue provision was enacted in response to the Supreme Court’s opinion in United States v. Johnson, 323 U.S. 273, 65 S.Ct. 249, 89 L.Ed. 236 (1944), where the Court articulated a rule favoring restrictive construction of venue provisions. In Johnson, the defendant had been charged with an offense involving “use [of] the mails or any instrumentality of interstate commerce.” Finding there was insufficient venue under the continuing violation provision of the first paragraph of § 3237(a), the Court overturned the conviction. In response to the Court’s ruling in Johnson, Congress expanded § 3237(a) by adding a second paragraph expanding-continuing violations to include “the use of the mails.” Brennan, 183 F.3d at 146.
Against this backdrop, the Second Circuit in Brennan held that mail fraud is not a continuing violation and, consequently, that § 3237 is inapplicable to the mail fraud statute:
[W]e agree with defendants that § 3237(a) is best read as not applying to statutes, like the mail fraud statute, that specify that a crime is committed by the particular acts of depositing or receiving mail, or causing it to be delivered, rather than by the more general and ongoing act of “us[ing] the mails.” Rather than make a defendant like Brennan subject to prosecution in any district through which a mail truck carrying his mail happened to drive (or perhaps even in any district over which an airplane carrying the mail happened to fly, or in which it happened to make an interim stop), we think Congress’s more particularized and careful phrasing in the mail fraud statute takes it outside the scope of § 3237(a) and is best read less expansively.
Id. at 147 (brackets in original). This well-reasoned decision also is consistent with dicta from the Third Circuit. See United States v. Turley, 891 F.2d 57, 60 (3d Cir.1989) (acknowledging and approving government concession that “18 U.S.C. § 3237 ... is not applicable to mail fraud.”).
A close comparison of the text of § 3237(a) with that of the mail fraud statute, 18 U.S.C. § 1341, compels this conclusion. Recall that § 3237(a) applies to crimes involving “use of the mails.” As the Brennan court noted, “[t]here are today many ... statutes that expressly prohibit ‘use of the mails’ in connection with various activities for various purposes.” 183 F.3d at 147.3 Mail fraud, however, “specifies] that a crime is committed by the particular acts of depositing or receiving mail, or causing it to be delivered, rather than by the more general and ongoing act of ‘us[ing] the mails.’ ” Id. (second brackets in original). Had Congress intended to include mail fraud as a “eontinu-*723ing offense” under § 3237(a), it would have defined mail fraud as involving “use of the mails.” Its refusal to do so, especially considered in light of the numerous statutes invoking “use of the mails,” is a compelling reason not to apply § 3237(a) to mail fraud.
Furthermore, § 3237 is inapplicable to statutes which contain their own venue provisions. See Travis, 364 U.S. at 636-37, 81 S.Ct. 358 (1961). Section 1341 specifically defines the locus of mail fraud prosecutions as the situs of “scheme or artifice to defraud,” or the location where the defendant “places”, “causes to be deposited”, or “takes or receives” an item for delivery through the Postal Service. 18 U.S.C. § 1341. These provisions expressly contemplate the acts which trigger venue and preempt the more general venue provisions contained in § 3237(a). See id. at 147.
Based on these considerations, the United States Department of Justice policy opines that § 3237 is inapplicable to the mail fraud statute: “The locus for mail fraud prosecutions is specifically set forth in section 1341; since Congress has ‘otherwise expressly provided [the situs for venue],’ section 3237 is inapplicable to mail fraud.” United States Department of Justice, Criminal Resource Manual 966 (1997).
Moreover, the majority’s holding that a prosecutor can establish venue in any district that the mail moves through is extremely expansive, and invites conflict with the Constitution’s guarantee that trials be held at the location of the crime. The Sixth Amendment’s requirement that defendants be tried in the district where their alleged crimes took place reveals a policy against enhancing the already-onerous burdens of trial by establishing venue in a far-off locale. The majority’s reasoning impairs this important constitutional policy.4 By applying § 3237(a) to mail fraud, the majority could permit the government to hale a defendant into court in distant jurisdictions having virtually no relation to the underlying crime. To illustrate, consider a defendant who initiated a Ponzi scheme by mailing letters from Cleveland soliciting “investments” to residents of California. Suppose further that the U.S. Postal Service routs mail from Cleveland to California through a postal center in Kansas City. The defendant could potentially be forced to stand trial in Kansas City despite the fact that his mail fraud concerned nary a Missourian.5 This example shows how Government could use this expansive interpretation of venue to increase the burden of defending a case in federal court.
The majority argues that using § 3237 does not expand Wood’s vulnerability to suit in far-away jurisdictions. Although true in this case, the majority’s holding greatly expands the number of locations other defendants may be summoned to. Indeed, future defendants will likely be summoned to trial in a distant jurisdiction *724merely because the postal system happened to route a piece of mail though that location. As I see it, this outcome plainly violates the constitutional policy, expressed in Article III and the Sixth Amendment, against exacerbating the burdens of trial by establishing venue in far-away locations.6
B. Appropriateness of Venue Where the Scheme Was Hatched
At the outset of this discussion, I wish to highlight that this case presents an unusual factual setting for discussing venue under the mail fraud statute. Typically, the district where a defendant set up and carried the scheme to defraud also is the place from which mail was sent or received. Thus, most federal courts have never addressed whether venue under § 1341 is also appropriate where the defendant carried out the scheme to defraud, in the rare circumstances that a mailing is not easily traceable to that area. Only a handful of district courts have dealt direetly with the matter and they have not come to any consensus. Compare United States v. Mikell, 163 F.Supp.2d 720, 728 (E.D.Mich.2001) (holding that venue was proper in any district through which the mail moved), with United States v. Olen, 183 F.Supp. 212, 218 (S.D.N.Y.1960) (holding that venue was proper in the district where the defendants initially devised their fraudulent scheme). As district courts take opposing sides on the issue, the only thing that is clear is that the law is unclear.
Thus, no binding precedent exists from the Sixth Circuit Court of Appeals (or any other circuit) addressing the appropriateness of venue in the present matter.7 The Eastern District of Michigan, in Mikell, notes that the Sixth Circuit never before has decided the matter: “This issue is a novel one, especially in light of the Supreme Court decision in Rodriguez-Moreno.” 163 F.Supp.2d 720, 728 (reversed on other grounds). Further, in Brennan the Second Circuit — the only other Circuit to *725decide (albeit in passing) whether venue under § 1341 can be based on the scheme to defraud described the lack of clarity in this area of the law: “We cannot tell whether the reasoning of [the Supreme Court in] Rodriguez-Moreno would make venue appropriate for a prosecution under § 1341 not only in districts where mail matter was sent or received in furtherance of a fraud [sic] scheme, but also in any district where any aspect of the ‘scheme or artifice to defraud,’ 18 U.S.C. § 1341, was practiced.” 183 F.3d 139, 145 (2d Cir.1999) (emphasis added).
Given that this ruling sets precedent regarding the scope of venue under § 1341, we should look to the text of the statute, the legislative history, the Supreme Court’s mandates for how to interpret the statutory text in such situations, and public policy concerns. I fear that the majority adopts a frame of analysis that ignores great inconsistencies and practical difficulties created by its approach.
In United States v. Rodriguez-Moreno, 526 U.S. 275, 119 S.Ct. 1239, 143 L.Ed.2d 388 (1999), the Supreme Court addressed how to decide where venue lies. To decide whether venue is appropriate “a court must initially identify the conduct making up the offense (the nature of the crime) and then discern the location of the commission of the criminal acts.” Id. at 279, 119 S.Ct. 1239. The Supreme Court has said that the “locus delicti [of the charged offense] must be determined from the nature of the crime alleged and the location of the act or acts constituting it.” United States v. Cabrales, 524 U.S. 1, 6-7, 118 S.Ct. 1772, 141 L.Ed.2d 1 (1998) (quoting United States v. Anderson, 328 U.S. 699, 703, 66 S.Ct. 1213, 90 L.Ed. 1529 (1946)). The Rodriguez-Moreno Court recognized that essential conduct elements may be “embedded in a prepositional phrase and not expressed in verbs,” and asserted that verbs are not “the sole consideration in identifying conduct that constitutes an offense.” Id. at 280, 119 S.Ct. 1239. A study of the mail fraud statute will clarify the essential conduct elements of the statute.
The mail fraud statute describes the central acts forbidden: “Whoever, having devised or intending to devise any scheme or artifice to defraud ... places, ... deposits, or causes to be deposited ... or knowingly causes to be delivered [mail matter] ... shall be fined under this title or imprisoned not more than 20 years.... ” 18 U.S.C. § 1341. The mail fraud statute therefore involves (1) a scheme to defraud and (2) a deposit or a delivery of mail. The majority asserts that venue is proper where mail is placed, deposited, travels through or is delivered through the postal system. The majority does not pay heed to the critical phrase of § 1341 — “[wjhoever, having devised or intending to devise any scheme or artifice to defraud.” The ultimate dispute is one of textual interpretation.
First of all, the text of the statute establishes that venue is appropriate in the district encompassing the situs of the scheme to defraud. Applying the standard established in Rodriguez-Moreno, the scheme to defraud is the more essential conduct element in mail fraud. As the statute reads, the mailings themselves are illegal only to the extent that they further an ongoing fraudulent scheme. See, e.g., United States v. Griffith, 17 F.3d 865, 874 (6th Cir.1994). In this sense, the mailing is merely a jurisdictional “hook,” secondary in importance to the substantive scheme.
Additionally, the mail fraud statute’s legislative history supports the conclusion that the fraud, and not the mailing, is the central conduct of the mail fraud offense. The legislative history that exists establishes that, when enacting the mail fraud *726statute, Congress primarily concerned itself with the alleviation of fraud, not the protection of the mails. In 1948, Congress passed the current mail fraud statute, codified in part at 18 U.S.C. § 1341. The modern statute stems from a predecessor statute, originally enacted in 1872 as part of the recodification of the postal laws. The legislative history for the mail fraud statute is sparse. However, in 1870 the sponsor of the original statute noted that the mail fraud component was intended “to prevent the frauds which are mostly gotten up in the large cities ... by thieves, forgers, and rapscallions generally, for the purpose of deceiving and fleecing the innocent people in the country.” McNally v. United States, 483 U.S. 350, 356, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987) (quoting Remarks of Rep. John Franklin Farnsworth, Cong. Globe, 41st Cong., 3d Sess. 35 (1870) (emphasis added)).8 Commentators who have studied the legislative history of the mail fraud statute also have described the purpose of the statute as seeking to eliminate fraud: “There existed a perceived need for federal intervention to dispel widespread fraud.” Jed S. Rakoff, The Federal Mail Fraud Statute (Part I), 18 Duq. L.Rev. 771 (1980) (emphasis added).
Third, contemporary case law supports the view that the scheme to defraud comprises the integral part of mail fraud. For example, the Supreme Court has minimized the importance of mailings in establishing a mail fraud offense:
“To be part of the execution of the fraud, however, the use of the mails need not be an essential element of the scheme. It is sufficient for the mailing 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, 109 S.Ct. 1443, 103 L.Ed.2d 734 (1989) (internal citations omitted). The Sixth Circuit also has downplayed the importance of mailings in establishing mail fraud, noting that a legal mailing will violate the federal mail fraud statute if it furthers a fraudulent scheme. United States v. Hopkins, 357 F.2d 14, 17 (6th Cir.1966).
Indeed, the Southern District of New York also has explained that the mailing is merely the hook to federal jurisdiction, while the fraud is the essence of the offense:
It is [ ] true ... that the “gist” of a mail fraud case is the mailing. This statement, however, is true only in the sense that until a use of the mail occurs, no federal jurisdiction exists. The evil to be combated, of course, is the fraud and I have no doubt that Congress could constitutionally provide for trial of a mail fraud case in the district where the scheme was hatched even though all mailings took place in another district.
Olen, 183 F.Supp. at 218. For these reasons, the scheme to defraud, not the protection of the mails, is the central prohibited activity of fraudulent mailing under § 1341.
After considering the conduct making up the offense of mail fraud, it is difficult to find justification for holding Wood’s trial in the Southern District of Ohio or the Eastern District of Michigan. At best, the only connections with those places are the incidental mailing of less important documents. The fraud’s core centered in the Western District of Michigan and most of the evidence and connections lay there. It is notable that the “independent value in trial at the place of offense” is that “this *727may be where the witnesses will be located.” Charles Alan Wright, Federal Practice and Procedure: Criminal § 301(3d ed.2000). Most of the witnesses and evidence are found near the situs of the fraudulent scheme — the obvious location for a fair trial. Further, the majority’s holding implicates judicial economy and fairness to the defendant. It is unnecessarily duplicitous if federal prosecutors pursue — and judges must try — separate cases for each location where defendants sent or received mail. Four decades ago, the Second Circuit noted that modern policy concerns may merit an expansion of venue under the mail fraud statute. Such concerns are even more pressing today:
[W]e cannot ignore the fact that the venue rule for mail fraud cases was developed many decades ago, when more restricted notions of the limits of federal power prevailed than exist today. Were the issue of the appropriate place of trial in such cases to arise [de] novo in 1960, it is by no means clear that trial would not be permitted at the place where the fraudulent scheme was developed as well as at the place where the mailing has its impact.
United States v. Cashin, 281 F.2d 669, 674 (2d Cir.1960); see also Wright, supra, § 303, at 323 (“A similar principle should apply as to use of the mails to defraud.... [I]t can be fairly argued that the place where the scheme to use the mails to defraud was devised is also a proper venue.”).
I would therefore find that venue exists where the fraudulent conduct is centered, where items of mail are deposited, where they are received, and where they are caused to be delivered. In this case, the Western District of Michigan is where the scheme was centered, where Wood sent out advertising to national publications soliciting customers, sent out packets of information in response to inquiries from potential customers, took telephone messages and offer excuses why Defendant could not answer a customer’s call, prepared loan documents; disbursed loan proceeds, accepted the stock offered as collateral, directed the distribution of the proceeds from the sale of the stock, and sent letters to traders concerned about the fate of their collateral.
In summation, when considering the mail fraud statute in light of legislative history, a plain reading of the text, the Supreme Court’s mandates for textual interpretation, and public policy, venue for mail fraud may be based on the situs of the scheme to defraud.
III. Conclusion
To summarize, I respectfully dissent from the majority’s conclusion that venue was improper as to the mail fraud counts. While I agree with all of the other legal conclusions of this Court, I have provided supplemental reasoning regarding why Defendant Wood’s transactions are not protected under the rubric of “short sales against the box.”

. 3 Law Sec. Reg. § 14.22 (4th Ed.).

. Technically, the Sixth Amendment addresses only "vicinage” (the place from which jurors are to be selected) rather than venue. See United States v. Brennan, 183 F.3d 139, 144 n. 5 (2d Cir.1999) (citing Charles Alan Wright, Federal Practice and Procedure: Criminal 2d § 301, at 190 (1982)). This distinction is meaningless, however, “because the requirement that the jury be chosen from the state and district where the crime was committed presupposes that the jury will sit where it is chosen.” Id. (quoting United States v. Passodelis, 615 F.2d 975, 977 n. 3 (3d Cir.1980)).

. The Brennan court cited the following code sections:
18 U.S.C. §§ 43(a)(1) (animal enterprise terrorism); 514(a)(3) (false or fictitious instruments or obligations); 844(e) (threats or false statements concerning explosive materials); 1461 (obscene or crime-inciting matter); 1717(b) (miscellaneous nonmaila-ble matter); 1735(a)(1) (sexually oriented advertisements); 1738(a) (private identification documents without disclaimer); 1952(a) (various unlawful activities); 2101 (inciting, and other activity connected to, riots); 2332b(b)(l)(A) (acts of terrorism transcending national boundaries).
183 F.3d at 147.

. The Supreme Court’s opinion in United States v. Johnson reflects the importance of this policy:
Questions of venue in criminal cases, therefore, are not merely matters of formal legal procedure. They raise deep issues of public policy in the light of which legislation must be construed. If an enactment of Congress equally permits the underlying spirit of the constitutional concern for trial in the vici-nage to be respected rather than to be disrespected, construction should go in the direction of constitutional policy even though not commanded by it.
323 U.S. 273, 276, (1944).

. As the Second Circuit recognized in Brennan, this might be the case even if the mail did not travel through the Kansas City distribution center, but merely traveled in an airplane that crossed over Missouri airspace en route to California. See Brennan, 183 F.3d at 147.

. The majority aptly notes that the current policy of the United Stated Department of Justice ("DOJ”) "opposes mail fraud venue based solely on the mail matter passing through a jurisdiction.” United States Attorney’s Manual 9-43.300 (1997). However, such a policy does not resolve the dissent’s concerns that defendants may be tried in a distant district based on the tenuous connection that a piece of mail passed though this location. § 3237(a). First, the DOJ policy is based on the presumption that § 3237 is inapplicable to mail fraud — a presumption which this court contradicts. See Criminal Resource Manual at 966. Second, the DOJ policy is not binding law. Indeed, the policy does not even presume to bind the United States Attorneys as it "opposes” such an application of the law but does not "prohibit” it.

. The Sixth Circuit has not previously addressed the applicability of § 3237(a) to the mail fraud statute in a published opinion. The majority cites to the unpublished opinion of United States v. Holt, 899 F.2d 15, 899 F.2d 15, 1990 WL 37613 (6th Cir. Apr.3, 1990). In the Sixth Circuit, unpublished decisions "early no precedential weight [and] have no binding effect on anyone other than the parties to the action.” Sheets v. Moore, 97 F.3d 164, 167 (6th Cir.1996).
The majority also cites Kreuter v. United States, 218 F.2d 532 (5th Cir.1955) for the proposition that venue would not be appropriate at the locus of the scheme to defraud apart from a mailing. The dicta of Kreuter states: "The place where the scheme is conceived or put in motion is immaterial” to venue. Id. at 534. However, this case more narrowly holds that venue is appropriate at the place of a mailing or delivery by mail, even if the scheme to defraud did not occur in that jurisdiction. I do not dispute this finding, indicating the deposit of mail establishes venue under § 1341. What is at dispute here is whether a trial for mail fraud cannot take place at the locus of the scheme to defraud without a mailing. The Fifth Circuit does not address this point in Kreuter and the dicta in Kreuter cannot amount to a Fifth Circuit holding on the matter.

. These remarks were made during the debate on H.R. 2295, the recodification legislation introduced during the 41st Congress. The recodification bill was not passed by the 41st Congress, but was reintroduced and passed by the 42d Congress with the antifraud section intact. Act of June 8, 1872, ch. 335, §§ 149 and 301, 17 Stat. 302 and 323.