Court Opinion

ID: 2718751
Source: CourtListenerOpinion
Date Created: 2014-08-19 13:00:30.675887+00
Date Added: 2024-06-11T10:38:15.325735
License: Public Domain

Case: 13-14089     Date Filed: 08/19/2014   Page: 1 of 13

                                                              [DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                         FOR THE ELEVENTH CIRCUIT
                           ________________________

                                  No. 13-14089
                             Non-Argument Calendar
                           ________________________

                   D.C. Docket No. 1:12-cr-00181-MHT-WC-1

UNITED STATES OF AMERICA,

                                                                  Plaintiff-Appellee,

                                       versus

EDWARD LINCOLN FOREHAND,

                                                               Defendant-Appellant.

                           ________________________

                   Appeal from the United States District Court
                       for the Middle District of Alabama
                         ________________________

                                 (August 19, 2014)

Before HULL, MARCUS and WILSON, Circuit Judges.

PER CURIAM:

      Edward Forehand appeals his convictions and sentences for five counts of

wire fraud, in violation of 18 U.S.C. § 1343, two counts of mail fraud, in violation
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of 18 U.S.C. § 1341, two counts of securities fraud, in violation of 15 U.S.C.

§§ 77q(a)(2), 77x, and four counts of monetary transactions in criminally derived

property, in violation of 18 U.S.C. § 1957. First, Forehand argues that the district

court erred in applying a sophisticated means enhancement. Forehand concedes

that the scheme was sophisticated; however, he contends that because he was not

involved in the sophisticated aspects of the scheme, the enhancement should not

apply. Second, Forehand argues that there is insufficient evidence to sustain his

convictions because the government failed to establish that he acted with the

required intent. After review of the parties’ briefs and the record on appeal, we

affirm Forehand’s convictions and sentence.

                                 I. BACKGROUND

      According to the indictment, from about early 2006 through November

2009, Forehand solicited investments from individuals using the unincorporated

business name USA Marketing. Forehand’s “pitch” was that he had a relationship

with an individual, the “associate,” whose business, Elite, had agreements with

colleges and universities to sell them cookware. In turn, the schools would sell the

cookware as a fundraiser. Elite required financing to purchase the cookware, but

the profit margin was large and Elite could afford to pay high rates of return to

individuals who would provide financing. Prospective investors received these

representations directly from Forehand or from persons who detailed what they had

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heard about investing in Elite. Forehand provided most investors with an

Investment Receipt Acknowledgement (IRA), which recited the amount of the

investment, the purpose of the investment (investing in Elite), and promised an

annual rate of return ranging from 175% to 325%.

      In reality, Forehand used investor funds for purposes other than investment

and only forwarded to Elite approximately 20% of the funds he received from

investors. He used the remaining funds to repay investors or for his personal

expenses. He failed to disclose the associate’s identity, in part, because she had

two prior criminal convictions. Her true name was Vicky Yeager, and Forehand

had known her for many years.

      He also failed to disclose that in early August 2009, six checks from Elite to

USA Marketing totaling approximately $600,000 bounced. Elite never made good

on the checks, and from that point forward, Forehand stopped sending any investor

money to Elite. He failed to tell the investors about the bounced checks. On or

about November 10, 2009, Yeager died and neither she nor Elite had any

significant assets. After Yeager died, Forehand paid no further funds to investors.

                                     II. Discussion

      Forehand raises two arguments on appeal. We address each in turn.

A. Sophisticated Means Enhancement

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      Forehand first argues that the district court improperly enhanced his

sentence by applying a “sophisticated means” enhancement. We “review[] the

district court’s interpretation and application of the sentencing guidelines de novo.”

United States v. Machado, 333 F.3d 1225, 1227 (11th Cir. 2003). Section

2B1.1(b)(10)(C) of the Sentencing Guidelines provides a two-level enhancement if

the offense involved “sophisticated means.” U.S.S.G. § 2B1.1(b)(10)(C). The

commentary in the Guidelines defines “sophisticated means” as “especially

complex or especially intricate offense conduct” that pertains to executing or

concealing the offense. Id. § 2B1.1, cmt. n.9(B). We have held that each of a

defendant’s individual actions need not be sophisticated, provided that the totality

of the scheme was sophisticated. United States v. Ghertler, 605 F.3d 1256, 1267

(11th Cir. 2010). Even where aspects of a defendant’s scheme were not

sophisticated and the defendant sometimes makes “little or no effort to conceal

either the fact of his fraud or his identity,” we have upheld a sentence where the

district court applied the sophisticated means enhancement when the totality of the

scheme to defraud was sophisticated. Id. at 1268. In United States v. Bane, we

concluded that, where the offenses involved repetitive, coordinated conduct

designed to allow the defendant to execute his fraud and evade detection, a

sophisticated means enhancement was appropriate. 720 F.3d 818, 827 (11th Cir.),

cert. denied, 134 S. Ct. 835 (2013).

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      Forehand’s offense was complex and intricate, both in its execution and in

concealment. See § 2B1.1, cmt. n.9(B). The evidence presented at trial established

that Forehand’s “offenses involved repetitive, coordinated conduct designed to

allow him to execute his fraud and evade detection.” Id. For several years,

Forehand solicited funds from investors and deposited them into an account owned

solely by him doing business as USA Marketing. Most of the money did not go to

Vicky Yeager to purchase cookware. The money that went into Forehand’s bank

account was used to pay prior investors their returns on their investments or was

used by Forehand for his own personal expenses and pleasures.

      Furthermore, Forehand sent Yeager less than one-half of the investment

funds. He concealed Yeager’s identity, a woman who had previously been

convicted of fraud, which allowed him to further the scheme. Even after Yeager

wrote bad checks, Forehand continued to perpetuate the scheme, accepting

investments from 42 new individuals. Based on these considerations, the district

court did not err in imposing a sophisticated means enhancement.

B. Sufficiency of the Evidence

      Forehand next contends that there is insufficient evidence to sustain his

convictions. We review the sufficiency of the evidence de novo. United States v.

Maxwell, 579 F.3d 1282, 1299 (11th Cir. 2009). “[T]he standard applied is the

same whether the evidence is direct or circumstantial.” United States v. Utter, 97

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F.3d 509, 512 (11th Cir. 1996). In determining whether there is sufficient evidence

to support the convictions, “we must view the evidence in the light most favorable

to the government and decide whether a reasonable fact finder could have reached

a conclusion of guilt beyond a reasonable doubt.” United States v. Herrera, 931
F.2d 761, 762 (11th Cir. 1991). “Proof may be established through circumstantial

evidence or from inferences drawn from the conduct of an individual.” Utter, 97
F.3d at 512. “[C]redibility determinations are the exclusive province of the jury.”

United States v. Calderon, 127 F.3d 1314, 1325 (11th Cir. 1997) (internal

quotation marks omitted). Statements by the defendant, if disbelieved by the jury,

can be considered substantive evidence of the defendant’s guilt. United States v.

Brown, 53 F.3d 312, 314 (11th Cir 1995). Forehand argues that the evidence was

insufficient to establish the intent element of each of the offenses. Because the

government presented sufficient evidence of Forehand’s intent, we affirm his

convictions.

      1. Counts One through Five: Wire Fraud

      Counts One through Five of the indictment charged Forehand with

committing wire fraud in violation of 18 U.S.C. § 1343.

      Mail and wire fraud are analytically identical save for the method of
      execution. Both offenses require that a person (1) intentionally
      participates in a scheme or artifice to defraud another of money or
      property, and (2) uses or causes the use of the mails or wires for the
      purpose of executing the scheme or artifice. The first element, a
      scheme or artifice to defraud, requires proof of a material
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      misrepresentation, or the omission or concealment of a material fact
      calculated to deceive another out of money or property. A
      misrepresentation is material if it has a natural tendency to influence,
      or is capable of influencing, the decision maker to whom it is
      addressed.

United States v. Bradley, 644 F.3d 1213, 1238–39 (11th Cir. 2011) (footnotes,

citations, and internal quotation marks omitted). “Proof of intent to defraud is

necessary to support convictions for mail and wire fraud.” Id. at 1239. “An intent

may be found when the defendant believed that he could deceive the person to

whom he made the material misrepresentation out of money or property of some

value.” Maxwell, 579 F.3d at 1301 (internal quotation marks omitted). “A jury

may infer an intent to defraud from the defendant’s conduct.” Bradley, 644 F.3d at

1239 (internal quotation marks omitted). “Evidence that a defendant personally

profited from a fraud may provide circumstantial evidence of an intent to

participate in that fraud.” Id. (internal quotation marks omitted).

      There is sufficient evidence to demonstrate that Forehand had the requisite

intent required for wire fraud. At trial, the circumstantial evidence presented by

the government demonstrated that Forehand personally and repeatedly

misrepresented or omitted material facts in an attempt to influence investors to

invest in his scheme. For example, the victim-investors testified at trial that had

they known that Forehand’s business partner was a convicted fraudster, they would

not have invested with Forehand. Likewise, the victim-investors testified that had

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they known that Forehand’s business partner had bounced hundreds of thousands

of dollars in checks to him and other investors, they would not have invested with

him. These material misrepresentations to the victim-investors demonstrate

Forehand’s intent to defraud those investors. See id. (“A jury may infer an intent

to defraud from the defendant’s conduct.”). Furthermore, Forehand profited

significantly from the fraud scheme. This is further circumstantial evidence of his

intent to participate in the fraud. See id. Accordingly, we affirm the wire fraud

convictions.

      2. Counts Six and Seven: Mail Fraud

      Forehand was also convicted of two counts of mail fraud (Counts Six and

Seven). A third count of mail fraud, Count Eight, was dismissed after the jury

verdict on motion from the government. As noted above, “[m]ail and wire fraud

are analytically identical save for the method of execution.” Id. at 1238.

      As discussed with respect to wire fraud, the evidence at trial established that

Forehand had the necessary intent to deceive the victim-investors because he lied

to them about material facts in order to obtain their money. See id. The

government demonstrated that Forehand had the necessary intent required to

sustain his mail fraud convictions. See id.

      Additionally, Forehand takes issue with the dates listed for Count Six only.

Forehand argues that there was a material difference between the charges as listed

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in the indictment from the evidence presented at trial; specifically the dates proved

for those crimes were different from the dates alleged. “[T]ime is not an essential

element of the offense, so long as the government establishes that the conduct

occurred reasonably near the date that the indictment mentions.” United States v.

Pope, 132 F.3d 684, 688–89 (11th Cir. 1998). “Ordinarily, we will not disturb a

conviction due to a variance between the date the indictment alleges the offense

occurred and the date the proof shows that it occurred if the date shown at trial

falls within the statute of limitations and before the return of the indictment.”

United States v. Roberts, 308 F.3d 1147, 1156 (11th Cir. 2002) (per curiam).

“Two purposes are served by the requirement that the allegations of the indictment

and the proof at trial correspond: (1) the defendant is properly notified of the

charges so that he may present a defense; and (2) the defendant is protected against

the possibility of another prosecution for the same offense.” Id. (internal quotation

marks omitted). In United States v. McIntosh, we concluded that because the date

of the offense was not an essential element of the offense, the error was of form,

not substance, and was not fatally defective. 580 F.3d 1222, 1228 (11th Cir.

2009).

      With respect to Count Six, there is only an eight-day difference between the

date alleged in the indictment and the date testified to at trial. The indictment

alleged that the mail fraud took place on October 20, 2008. The testifying witness

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said that he received the fraudulent document on October 28, 2008. The mail fraud

occurred reasonably near when the indictment alleged, and it occurred within the

statute of limitations and prior to the return of the indictment. See Pope, 132 F.3d

at 688–89; Roberts, 308 F.3d at 1156.

      The indictment charged that on or about October 20, 2008, Forehand mailed

an IRA to “KT” in Dothan, Alabama. The evidence at trial established that on

October 28, 2008, Kevin Tillman received in the mail an IRA from Forehand.

Forehand admitted at trial there was only one KT on the list of victims provided to

him, and that victim was Kevin Tillman. He admitted at trial that he had adequate

notice of this charge. Forehand’s argument as to this issue fails.

      3. Counts Nine and Ten: Securities Fraud

      Forehand was charged in counts nine and ten of his indictment with

securities fraud in violation of 15 U.S.C. §§ 77q(a)(2) and 77x. To show a

violation of 15 U.S.C. § 77q(a)(2), the government must prove: “(1) a material

misrepresentation or materially misleading omission, (2) in the offer or sale of a

security, (3) made with negligence.” S.E.C. v. Morgan Keegan & Co., 678 F.3d
1233, 1244 & n.12 (11th Cir. 2012) (per curiam). Section 77x provides that “[a]ny

person who willfully violates any of the provisions of [§ 77x]” or “makes any

untrue statement of a material fact or omits to state any material fact required to be

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stated therein or necessary to make the statements therein not misleading” commits

a criminal offense. 15 U.S.C. § 77x.

      On appeal, Forehand does not present any argument to support his

contention that there was insufficient evidence to uphold his convictions for

securities fraud. The government established all the elements of securities fraud by

presenting evidence that Forehand sold securities to investors by either

intentionally or negligently making both material misrepresentations to investors,

and by omitting material information relevant to the investment decision. And he

did so by using facilities in interstate commerce: the mail, telephones, and the

internet.

      Forehand made intentionally false assertions to investors that their money

would be used to purchase pots and pans when he knew that he was using the

money to pay off earlier investors and to pay himself. The investors relied on

Forehand’s material misrepresentations to invest in securities offered by Forehand

for sale. Forehand’s convictions for securities fraud are affirmed.

      4. Counts Eleven through Fourteen: Money Laundering

      To convict a defendant of money laundering under 18 U.S.C. § 1957, the

government must prove that: (1) the defendant “knowingly engage[d] or

attempt[ed] to engage in a monetary transaction in criminally derived property that

is of a value greater than $10,000,” and (2) the property “is derived from specified

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unlawful activity.” See United States v. Silvestri, 409 F.3d 1311, 1332–33 (11th

Cir. 2005) (internal quotation marks omitted). Proof of fraud is necessary to

support a conviction for engaging in monetary transactions in property derived

from specified unlawful activity. United States v. Naranjo, 634 F.3d 1198, 1207

(11th Cir. 2011). “A scheme to defraud requires proof of a material

misrepresentation, or the omission or concealment of a material fact calculated to

deceive another out of money or property.” Id. (internal quotation marks omitted).

“A jury may infer an intent to defraud from the defendant’s conduct.” Id. (internal

quotation marks omitted). “Evidence that a defendant personally profited from a

fraud may provide circumstantial evidence of an intent to participate in that fraud.”

Bradley, 644 F.3d at 1239 (internal quotation marks omitted).

      At trial, the government presented sufficient evidence to establish that

Forehand knowingly engaged in monetary transactions in criminally derived

property, when, on the dates alleged in the indictment, he used funds derived from

his fraud in amounts greater than $10,000, for his own personal use or for the

benefit of a relative. He made material misrepresentations and omitted material

facts when he pitched his scheme to investors, and he personally benefited

significantly from this scheme to defraud. Accordingly, his convictions for money

laundering are affirmed.

      AFFIRMED.

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