Court Opinion

ID: 9471381
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:30:55.281627+00
Date Added: 2024-06-11T17:42:22.997718
License: Public Domain

WINTER, Circuit Judge,
concurring in part and dissenting in part:
The indictment was framed to allege ten counts, each of which involved a particular phone call placed on a particular date. Two of the calls were never connected to the defendants and I concur in the majority’s dismissal. The remaining eight calls were all placed from a particular phone in North Carolina to a bank in New York. The indictment alleged that each of these calls was a separate crime since each furthered a single scheme to defraud the State and City of New York and to deprive these authorities of tax revenue due on the sale of cigarettes.
The evidence showed that the defendants were engaged in purchasing cigarettes without a North Carolina tax stamp for resale. The seller customarily confirmed by phone that the purchase money had been deposited in a particular bank account in New York. Each of the eight counts involves such a phone call. The cigarettes were then loaded either into a truck camouflaged so as to make it appear that it was carrying pipe or into vans of ordinary appearance. Some of the cigarettes were transported to New York City and sold there. However, as the government conceded on oral argument, there was no proof as to where the great bulk of the cigarettes were transported and sold, and no connection was made between any one of the phone calls named in each count and the transportation and sale of cigarettes in New York.
Analysis must begin with the question of what the government was required to prove under the indictment as framed. Had the indictment alleged in one count a conspiracy to commit wire fraud, the proof was clearly sufficient. Had the indictment alleged in one count a scheme to defraud New York City and New York State of tax money and the use of the wires in furtherance of the scheme, the proof was also sufficient. Had the evidence shown that each call resulted in the use of the camouflaged truck to transport cigarettes to New York for resale there, I would join the majority in affirming the eight counts on the grounds that a deceptive act resulting in a fraud of New York had been proven.
Under the caselaw cited by the government, it must prove a scheme involving a false statement or other deception intended to cause a designated governmental authority to lose tax revenue. All the evidence showed, however, was a scheme to purchase and, presumably, sell cigarettes without a tax stamp. If deception of New York was proven, it was only in the occasional use of the camouflaged truck, one trip in that truck to New York City, and the sale of a small number of cigarettes there. None of the calls alleged in the eight counts involved the truck, the trip to New York or the sales. As framed, therefore, the indictment thus raises the very troublesome question of whether each and every use of the wires in any connection with a single scheme to defraud can be alleged and proven as a separate count.
Although there appears to be little authority directly on point, it would seem to me that some line drawing is in order. *766Congress surely did not intend that the exposure to criminal liability should be so dependent upon the number of phone calls or wire transmissions made. For one thing the exposure is entirely random not only because small frauds may include multiple uses of the wires while large ones do not, but also because relatively innocuous uses of the wires are as criminal as those actually involving fraudulent communications. The theory of the government would render as criminal a would-be swindler’s phoning for a pizza to allow him to eat while working as a call which is itself a fraudulent act. For another, the constitutional protection against double jeopardy becomes relatively meaningless since successive prosecutions need only allege different calls.
Such line drawing is not difficult. For example, the Congressional purpose would be fully effectuated by allowing a separate count for each conspiracy, a count for each scheme to defraud utilizing wire transmissions, and a separate count for each actual fraudulent act utilizing a wire transmission.
Under such a rule, the eight count indictment in the present case was not proven. Having chosen to frame the indictment as it did, the government was obligated to prove each element on each count. United States v. Robinson, 545 F.2d 301 (2d Cir.1976). This it failed to do. First, there is no proof that the cigarettes purchased as a result of any of the eight phone calls were sold in New York. That the laws, tax or otherwise, of that state or some other were violated, is simply assumed. Second, there has been no proof of either deception or a false statement in connection with any particular phone call. An act of deception might have been proven had the government shown use of the camouflaged truck in connection with the eight phone calls but it did not.
The legal theory of the conviction, therefore, is either that every use of the wires with some connection to a single scheme to defraud is a crime or that a wire fraud is made out by the use of a phone in connection with the simple non-payment of state or local taxes without proof either of deception or the identity of the taxing authority involved. I cannot accept either theory and, therefore, dissent.1

. Affirmance renders into insignificance the Jenkins Act, 18 U.S.C. §§ 2341 et seq., a federal criminal statute which specifically regulates trafficking in contraband cigarettes. This legislation, intended to provide federal assistance to states in collecting revenue due for the sale of cigarettes, spells out in detail the kinds of trafficking in contraband cigarettes which Congress believed to be sufficiently serious to call for federal intervention. For example, more than 60,000 cigarettes must be involved which contain no evidence of compliance with the state law where they are found if the particular state requires a procedure such as stamping. If the wire fraud legislation reaches every nonpayment of state taxes on cigarettes, however, no federal prosecutor will ever have a reason to use the Jenkins Act even though it, rather than the wire fraud statute, is the product of Congressional study of the problem of contraband cigarettes.