Court Opinion

ID: 821463
Source: CourtListenerOpinion
Date Created: 2013-02-27 19:55:12.294961+00
Date Added: 2024-06-11T15:36:58.583177
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 11-5129

UNITED STATES OF AMERICA,

                Plaintiff - Appellee,

          v.

DANNY MICHAEL HANCOCK,

                Defendant - Appellant.

Appeal from the United States District Court for the Middle
District of North Carolina, at Greensboro.   N. Carlton Tilley,
Jr., Senior District Judge. (1:10-cr-00043-NCT-1)

Submitted:   January 15, 2013             Decided:   February 27, 2013

Before TRAXLER,   Chief   Judge,   and   GREGORY   and   SHEDD,   Circuit
Judges.

Affirmed by unpublished opinion.       Judge Gregory wrote the
opinion, in which Chief Judge Traxler and Judge Shedd joined.

A. Wayne Harrison, Sr., LAW OFFICES OF WAYNE HARRISON,
Greensboro, North Carolina, for Appellant. Ripley Rand, United
States Attorney, Frank J. Chut, Jr., Assistant United States
Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Greensboro,
North Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
GREGORY, Circuit Judge:

             Danny      Michael       Hancock      was   tried     and     convicted       of

federal      mail       fraud     and     aggravated         identity           theft     for

perpetrating        a    fraudulent      motor        vehicle     sales     scheme.         A

judgment of forfeiture was also entered against him.                               Hancock

now   challenges        his    mail    fraud      convictions,     arguing        that    his

tangential use of the mail cannot substantiate his convictions.

In addition, he argues the resultant identity theft convictions

must also be reversed and the judgment of forfeiture entered

against him vacated.             We find Hancock’s arguments unpersuasive

and   therefore         affirm    his    convictions        and     the     judgment      of

forfeiture.

                                             I.

             Since 1998, Hancock operated a License Plate Agency

(“LPA”),     in     Thomasville,        North         Carolina.          LPAs    privately

contract with the North Carolina Department of Motor Vehicles

(“DMV”) to process title work and renewals.                         Besides operating

the   LPA,   evidence         shows   that     between    2004     and    2007,    Hancock

operated a business called Atlantic Coast Equipment Sales and

Leasing (“ACE”), which sold motor vehicles and trailers.                                There

were two problems with Hancock operating ACE:                       (1) ACE was not a

licensed motor vehicle dealer, a class one misdemeanor under

North Carolina law; and (2) under LPA Operating Procedures, an

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LPA    operator   is   expressly    prohibited    from   operating     a    motor

vehicle dealership. 1

             Using the LPA and ACE, Hancock devised a scheme to

conceal the sale of unlicensed motor vehicles.                   Hancock would

create falsified vehicle title applications, sale documents, and

notary verifications in order to “skip title.”              To successfully

operate the scheme, Hancock used the names of persons who bought

vehicles from him and the names of local car dealers, and made

it seem as though there was a direct sales transaction between

the two parties.        By “skipping title,” Hancock never showed up

as a registered owner of the vehicles in the DMV records and

therefore never had to pay the highway use taxes and title fees

due under North Carolina law. 2           To complete the fraud, Hancock

mailed the falsified title applications to the DMV for the sale

to    be   recorded    by   the   state   and   the   vehicles    to   be    duly

registered.       Such registration was required by North Carolina

law.

       1
       North Carolina law defines a “motor vehicle dealer” as a
person who sells or displays more than four vehicles within a
twelve-month period. N.C. Gen. Stat. Ann. § 20-286(11)(a)(1).
       2
       This scheme required Hancock to possess an “open title,”
which is illegal under North Carolina law. See N.C. Gen. Stat.
Ann §§ 20-72-20-75. An open title is a title where the seller’s
name is signed, but the buyer’s name is left blank.

                                           3
              On May 27, 2007, North Carolina DMV inspectors and

High Point Police Detectives executed a search warrant on ACE’s

sale lot.          During the search, law enforcement found evidence of

the scheme, including title applications, titles, bills of sale,

and a ledger.              The dates on the documents found during the

search revealed that the business was in operation while Hancock

operated the LPA, violating North Carolina policy.

              DMV        inspectors      obtained          and      reviewed       the       title

histories      for       the    vehicles      listed     in     ACE’s   ledger       and     other

files.       Review of the records revealed that neither Hancock nor

ACE appeared as registered owners of the vehicles sold in the

official      DMV    records.       Specifically,          the      investigation          showed

that    Hancock       skipped       title     for    a     1985      Ford   truck,       a    2000

Chevrolet Blazer, a 1997 Chevrolet truck, and a 1984 truck and

trailer.       Thus, the investigation showed that Hancock avoided

tax    and    title       fee    liability      for       the      vehicles    and      that    he

operated an unlicensed motor vehicle dealership.

              Based       on    this    information,          on    January       26,   2010,    a

federal grand jury returned a multiple-count indictment against

Hancock alleging numerous violations of 18 U.S.C. § 1341 (mail

fraud)       and    18     U.S.C.      § 1028A       (aggravated        identity         theft).

Hancock      pled     not      guilty    to    the       indictment.          A    jury      trial

commenced on October 19, 2010.                       On October 25, 2010, at the

close of trial, the jury found Hancock guilty of four counts of

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mail fraud and three counts of aggravated identity theft.                                          On

October    6,     2011,     Hancock           was        sentenced           to     45     months’

imprisonment      followed       by     3    years        of    supervised           release;      a

special assessment of $700 was also assessed.                                A final order of

forfeiture       was   entered        against           Hancock        in     the    amount        of

$607,517.32.

            Hancock timely appealed.

                                              II.

            Hancock       now        argues        that        there        was     insufficient

evidence for the jury to find him guilty of mail fraud.                                    When we

review a     sufficiency        of    the     evidence         claim,        we   ask    whether,

construing      the    evidence       in     the    light       most        favorable       to   the

government,      any    reasonable          trier        of    fact     could        have    found

Hancock guilty beyond a reasonable doubt of the charges of which

he was convicted.          United States v. Tresvant, 677 F.2d 1018,

1021 (4th Cir. 1982).

            To    be    found    guilty        of       mail    fraud        under    18    U.S.C.

§ 1341,    the    government          must    prove        that    the        defendant          “(1)

devised or intended to devise a scheme to defraud and (2) used

the mail . . . in furtherance of the scheme.”                                United States v.

Wynn, 684 F.3d 473, 477 (4th Cir. 2012) (citing United States v.

Jefferson, 674 F.3d 332, 366 (4th Cir. 2012)).                               Hancock does not

argue that the government failed to establish the first element;

                                                    5
he    readily     admits    he    created      a     fraudulent        scheme.        Instead,

Hancock’s appeal rests on his contention that the government

cannot prove the second element -- raising a number of arguments

as to why there was insufficient evidence to satisfy the use of

mails element.          We address the arguments seriatim.

                                               A.

              In Parr v. United States, the Supreme Court espoused

that    “‘[t]he      federal     mail    fraud       statute        does    not     purport     to

reach all frauds, but only those limited instances in which the

use    of   the     mails   is    a    part    of       the    execution       of   the    fraud

. . . .”        363 U.S. 370, 389-90 (1960) (quoting Kann v. United

States, 323 U.S. 88, 95 (1944)).                        Hancock argues the scheme in

question ended at the sale of the vehicles, and the mailing of

the title application was a mere formality required by state

law, thus failing to satisfy the use of mails element required

for a federal mail fraud conviction.

              Although      the       language          of     Parr    arguably       supports

Hancock’s position, the Court in Schmuck v. United States, 489

U.S.    705     (1989),     affirmed       a        mail      fraud     conviction        for    a

fraudulent scheme directly analogous to the one before us.                                       In

Schmuck,      the    defendant        purchased         used    cars,      rolled    back       the

odometers,        and   sold     them    to    dealers         at     prices      artificially

inflated by the low-mileage readings. Id. at 707. The dealers

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consummated the transactions by mailing title-application forms

to the state DMV on behalf of the buyers.                         Id.     The defendant

tried to argue, relying on Kann and Parr, that “mail fraud can

be predicated only on a mailing that affirmatively assists the

perpetrator in carrying out his fraudulent scheme.”                         Id. at 711.

The Court rejected this argument, finding that “although the

registration-form mailings may not have contributed directly to

the duping of either the retail dealers or the customers, they

were    necessary       to     the    passage    of    title,     which    in   turn   was

essential to the perpetuation of Schmuck’s scheme.”                         Id. at 712.

All     that     matters,        therefore,       is    that      the     mailings     are

“incidental to an essential part of the scheme.”                            Id. at 712

(quoting Pereira v. United States, 347 U.S. 1, 8 (1954)).

               The    reasoning        of   Schmuck      clearly     extends     to    the

fraudulent scheme devised by Hancock.                    The purpose of Hancock’s

scheme was to sell vehicles without paying the requisite taxes

and fees to the DMV.                 These taxes and fees were assessed upon

receipt    of    the     title       application.        Thus,    the     falsified    and

factually incorrect title applications that were sent via mail

were an essential part of the scheme in question — “they were

necessary to the passage of title.”                      See Schmuck, 489 U.S. at

712; United States v. Locklear, 829 F.2d 1314, 1318 (4th Cir.

1987)     (per       curiam)    (finding        the    use   of    mails    element     is

satisfied when the defendant knows “the use of the mails will

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follow in the ordinary course of business”).                It is clear that

mailing the title documents was essential to Hancock’s scheme.

                                        B.

              Hancock also argues the use of mails element was not

proven because the mailings were required by North Carolina law.

This argument is derived from Parr, in which the Court found the

“use of the mails” element was not met in part because the

mailings were “legally compelled.”               363 U.S. at 391 (finding

that a tax assessment sent by mail as required by law could not

support      a    federal   mail   fraud     conviction).    The     idea   that

“legally compelled” mailings cannot be used to prove federal

mail fraud was clarified in Schmuck.             In Schmuck, the Court held

that mailings are not “legally compelled” when they are made in

compliance with a state registration statute, as these mailings

would       not   have   been   made    “regardless    of   the     defendants’

fraudulent scheme.”         489 U.S. at 713 n.7.       The Court found that

mailings compelled by fraud, such that it is the fraudulent act

that triggers a state mailing requirement, can be used to prove

the “use of mails” element of the federal mail fraud statute.

Id.     Under Schmuck, therefore, it does not matter if a mailing

is “legally compelled” if the legal requirement is brought about

by    the    defendant’s    fraud,     necessarily    foreclosing    Hancock’s

argument.

                                             8
                                           C.

               Hancock raises one last claim as to why his mail fraud

convictions must be reversed, arguing there was no victim in

this case, and that without a victim, there is no fraud.

               This argument is fatuous.               Hancock is correct in that

mail fraud requires the specific intent to deprive someone of

something of value.           See Wynn, 684 F.3d at 478.                  And while he

may    not   have    deprived      the    people      to   whom    he    sold   vehicles

anything       of   value,    Hancock      did       intentionally       deprive    North

Carolina of taxes and title fees due under law – the state of

North Carolina is the victim of the fraud here.

                                           D.

               Hancock finally proclaims that “[o]f course he could

have    been    prosecuted        in    state    court     for    violations       of   the

several state statues referenced in the indictment herein; but

that is a different story than an attempt to cast a federal net

over his actions.”           Appellant’s Br. 16.              Contrary to Hancock’s

assertion, the federal mail fraud statute does cast a net over

his actions because as noted by the Supreme Court, “[t]he fact

that a scheme may violate state laws does not exclude it from

the    proscriptions         of   the    federal       mail      fraud   statute,       for

Congress ‘may forbid any (mailings) in furtherance of a scheme

that it regards as contrary to public policy whether it can

                                                 9
forbid the scheme or not.’”            Parr, 363 U.S. at 389 (quoting

Badders v. United States, 240 U.S. 391, 393 (1916)) (alteration

in   the    original).    The    federal     mail   fraud    statute   is

comprehensive in scope.     That Hancock violated a number of state

laws does not obviate his violations of the federal mail fraud

statute.

            A quote from Schmuck sums up our response to Hancock’s

appeal well:    “Under these circumstances we believe a rational

jury could have found that title-registration mailings were part

of the execution of the fraudulent scheme, a scheme which did

not reach fruition until [ACE and Hancock] resold the cars and

effected transfer of title.”       489 U.S. at 712.         No matter how

Hancock frames the way in which he used the mail, Supreme Court

precedent   clearly   supports   his    convictions.   Correspondingly,

Hancock’s mail fraud convictions are affirmed.

                                  III.

            Hancock next challenges his aggravated identity theft

convictions.    He does not attack the sufficiency of the evidence

presented to the jury on the identity theft charges.            He simply

argues that since his mail fraud convictions must be reversed,

his aggravated identity theft convictions should also be set

aside.

                                        10
                Mail     fraud   is   a    predicate         offense    to    being     found

guilty of aggravated identity theft. 18 U.S.C. § 1028A(c)(7);

see also United States v. Valerio, 676 F.3d 237, 244 (1st Cir.

2012).          Because    the   mail     fraud    convictions         are    supported      by

substantial evidence, and because Hancock does not independently

attack the sufficiency of the identity theft evidence put forth

to   the    jury,      the   aggravated      identity         theft    convictions       must

stand.

                                            IV.

                Hancock finally argues that the judgment of forfeiture

must be vacated due to the fact that the federal offenses of

which      he    was   convicted      should      be    reversed.        A        judgment   of

forfeiture requires a requisite underlying conviction. 18 U.S.C.

§ 982(a)(3)(E); see also United States v. Cherry, 330 F.3d 658,

670 (4th Cir. 2003).              As explained above, we affirm Hancock’s

convictions        and    therefore       uphold       the   judgment        of    forfeiture

entered against him.

                                             V.

                For the reasons detailed in this opinion, Hancock’s

convictions and the judgment of forfeiture entered against him

are affirmed.

                                                                                     AFFIRMED

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