Court Opinion

ID: 155459
Source: CourtListenerOpinion
Date Created: 2010-08-14 04:17:03+00
Date Added: 2024-06-11T15:01:09.121625
License: Public Domain

F I L E D
                                                                       United States Court of Appeals
                                                                               Tenth Circuit
                        UNITED STATES COURT OF APPEALS
                                                                              OCT 21 1997
                                   TENTH CIRCUIT
                                                                          PATRICK FISHER
                                                                                   Clerk

 UNITED STATES OF AMERICA,

          Plaintiff-Appellee,
                                                            No. 96-5144
 v.
                                                            No. 96-5176
                                                      (D.C. No. 95-CR-54-K)
 JAMES T. KALYVAS,
                                                   (Northern District of Oklahoma)
 MULK RAJ DASS,

          Defendants-Appellants.

                                ORDER AND JUDGMENT*

Before LUCERO, Circuit Judge, MURPHY, Circuit Judge, and MCWILLIAMS,
Senior Circuit Judge.

      No. 96-5144, United States v. Kalyvas, was orally argued before this panel on May

12, 1997. In 96-5176, United States v. Dass, counsel waived oral argument.

Accordingly, the two cases have been companioned for purposes of appeal.

      By superseding indictment, James T. Kalyvas (“Kalyvas”) and Mulk Raj Dass

(“Dass”) were charged in the first count with conspiracy to defraud (18 U.S.C. § 371) and

      *
         This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3
in four succeeding counts with wire fraud (18 U.S.C. §§ 1343 and 2(b)). A jury acquitted

Kalyvas on the first four counts of the indictment, but convicted him on Count 5 of the

indictment. He was sentenced to 18 months imprisonment. Dass was convicted on all

five counts of the indictment and was sentenced to 37 months imprisonment, three years

of supervised release, restitution in the amount of $25,000 and a special assessment of

$250. Both appealed their respective convictions.

       Count 1 of the superseding indictment charged Kalyvas and Dass with conspiring

from June 1, 1993, to June 1, 1994, to commit offenses against the United States in

violation of 18 U.S.C. § 371. Specifically, they were charged with conspiring to transmit

by means of wire communications in interstate commerce certain writings for the purpose

of executing a scheme to defraud Ronald Kirkpatrick (“Kirkpatrick”), and others doing

business as Oklahoma Feldspar Corporation (“Feldspar”), in violation of 18 U.S.C. §§

1343 and 2(b). The “Means and Methods” used by the two defendants were set forth in

the superceding indictment in detail, and the “Overt Acts” of the two were also spelled

out in detail.

       In Count 2 of the superseding indictment, the scheme to defraud was set forth with

even greater particularity and concluded by charging Kalyvas and Dass with transmitting,

in furtherance of their scheme to defraud, on August 17, 1993, by wire from Sarasota,

Florida, to Tulsa, Oklahoma, a document entitled “Contingent Consulting Agreement” for

the signature of Kirkpatrick, in violation of 18 U.S.C. §§ 1343 and 2(b). Paragraph J of

                                           -2-
Count 2 in the superseding indictment stated that a part of the scheme to defraud was that

the defendants would conceal from Kirkpatrick “Dass’ involvement in similar schemes in

the past.”1

       Count 3 of the superseding indictment charged the defendants with transmitting by

wire on August 17, 1993, from the First City Bank in Tulsa, Oklahoma, to the trust

account of Kalyvas at Barnett Bank of Southwest Florida, Sarasota, Florida, a $100,000

wire money transfer in furtherance of their scheme to defraud and in violation of 18

U.S.C. §§ 1343 and 2(b).

       Count 4 of the superseding indictment charged the defendants with transmitting by

wire on September 16, 1993, from Sarasota, Florida, to Tulsa, Oklahoma, an “extension

agreement” to the aforesaid “Contingent Consulting Agreement,” dated August 17, 1993,

extending the defendants’ time for performance until September 27, 1993, in furtherance

of their scheme to defraud and in violation of 18 U.S.C. §§ 1343 and 2(b).

       Count 5 of the superseding indictment charged the defendants with transmitting by

wire on December 1, 1993, from Sarasota, Florida, to Tulsa, Oklahoma, a “Further

Amendment to Contingent Consulting Agreement,” increasing the amount of the

       1
        Paragraph J of the second count in the original indictment charged that a part of
the scheme to defraud was that the defendants would conceal from Kirkpatrick the fact
that Dass had been convicted of fraud in a federal district court in Camden, New Jersey,
and had only been released from prison in Texas a short time prior to Dass’ first contact
with Kirkpatrick. As indicated, this particular allegation was not in the superseding
indictment.

                                           -3-
“guarantee bond” and extending the defendants’ time for performance to January 6, 1994,

in furtherance of their scheme to defraud and in violation of 18 U.S.C. §§ 1343 and 2(b).

       Some background information will help to place the issues raised on appeal in

focus. In 1992, Kalyvas, an Oklahoma attorney, received a telephone call from a Dr.

Dass, described by some as an international businessman and banker. Several years prior

to this call, Kalyvas apparently had a “chance meeting” with Dass in London, England.

Dass’ call to Kalyvas in 1992 was made from a jail in New Jersey, Dass then having been

recently convicted in a federal court in New Jersey of fraud. The purpose of the call was

to enlist Kalyvas’ aid in perfecting Dass’ appeal. Kalyvas explained that he did not,

himself, practice criminal law, but Kalyvas agreed to help Dass obtain an attorney to

represent him on appeal. Kalyvas apparently did, however, review parts of Dass’ trial

record and formed the opinion that the conviction might be “suspect.”

       In ensuing telephone conversations with Kalyvas, Dass told him that he had

numerous pending business transactions with which he needed the legal and business

assistance of Kalyvas. After making a limited background check, Kalyvas agreed to work

for Dass as his “trustee and attorney.”

       Shifting gears, Feldspar was formed by Kirkpatrick for the purpose of mining

feldspar for making glass. The company was in dire financial straights, having spent

hundreds of thousands of dollars of its investors’ money with no return thereon. The

                                           -4-
investors were threatening litigation, and Kirkpatrick thought he needed at least

$2,000,000 to get the business on its feet.

       One of the investors in Feldspar was a Ms. Leah Rich, who was apparently well

acquainted with a Ms. Pat Runyon, the city manager for Waurika, Oklahoma. Runyon

had contact with Dass at about this time, or shortly prior thereto, when Dass was assisting

the city in raising capital to construct a private jail facility. Because both Rich and

Runyon were impressed with Dass’ business acumen and his apparent access to “big

money,” they suggested to Kirkpatrick that he contact Dass to see if the latter could help

Feldspar obtain adequate financing, which Kirkpatrick proceeded to do.

       Thereafter, negotiations between Kirkpatrick and Dass occurred, with the latter

being represented at all times by Kalyvas. These negotiations culminated in an agreement

between Feldspar and Dass whereby Dass agreed to assist Feldspar in obtaining “a

financial guarantee bond” from an insurance company which would serve as collateral for

Feldspar’s prospective investors. Dass, acting through his “trustee and attorney,”

Kalyvas, had also represented that he knew many potential investors for Feldspar. The

“Contingent Consulting Agreement” to that general effect was sent by Kalyvas from

Florida to Kirkpatrick in Oklahoma on August 17, 1993. Pursuant to the agreement,

Kirkpatrick then sent the sum of $100,000 from Oklahoma by wire to Kalyvas’ trustee

account in Florida. It was the understanding that $90,000 would be used to purchase the

“guarantee bond,” and the remaining $10,000 was a “non-refundable” fee for Dass and,

                                              -5-
or, Kalyvas. It was further agreed that, if a “guarantee bond” could not be obtained, the

$90,000 would be promptly returned to Feldspar.

       Within days after Kirkpatrick deposited the $100,000 into Kalyvas’ trustee account

in Florida, Kalyvas caused virtually the entire $100,000 to be withdrawn from the

account, most of which was then spent by Kalyvas for his personal expenses, with a small

part thereof going to Dass. Needless to say, no “guarantee bond” was ever obtained, nor

was the $90,000 ever returned to Feldspar, even though several requests for extension of

time within which to obtain the “guarantee bond” or return the $90,000 were made. So

much for the background facts.

                                       KALYVAS

       In his initial conversation with Kirkpatrick, Kalyvas “vouched” for Dass in only

general terms, stating, in effect, that Dass was a well known and respected international

businessman and banker and that he had engaged in several deals similar to the one

eventually entered into between Feldspar and Dass. Kalyvas did not tell Kirkpatrick that

Dass had been convicted for wire fraud in New Jersey and had been only recently

released from prison. Kalyvas’ initial and perhaps principal argument in this court is that

since he was under no legal duty to tell Kirkpatrick that Dass had a prior criminal

conviction, any omission on his part to so tell cannot be the predicate upon which a

scheme to defraud could be based. In thus arguing, counsel relies on Chiarella v. United

                                            -6-
States, 445 U.S. 222 (1980) and United States v. Irwin, 654 F.2d 671 (10th Cir. 1981),

cert. denied, 455 U.S. 1016 (1982), neither of which, in our view, dictates a reversal in

the present case.

       Kalyvas was not charged with willfully concealing from Kirkpatrick the fact that

Dass had a prior felony conviction. As indicated in Count 1, Kalyvas and Dass were

charged with conspiring to use interstate wire communications in executing and

furthering a scheme to defraud Kirkpatrick and Feldspar, and in Counts, 2, 3, 4, and 5

they were charged as principals, and as aiders and abettors, with using interstate wire

communications to carry out and execute their scheme to defraud Kirkpatrick and

Feldspar..

       Specifically, in Count 5, the only count Kalyvas was convicted of by the jury, he

was charged with transmitting, or aiding and abetting in the transmission, by wire on

December 1, 1993, from Florida to Oklahoma a proposed extension of time for Dass to

perform, all of which was allegedly in furtherance of their original scheme to defraud.

The instructions did not instruct the jury that an essential element of the crime charged in

Count 5 was that Kalyvas intentionally concealed from Kirkpatrick the fact that Dass had

a prior felony conviction. Such, of course, was not an essential element of the crime

charged in Count 5.

       In this regard, the jury was instructed that as to Counts 2, 3, 4, and 5, the essential

elements were as follows:

                                             -7-
                      Three essential elements are required to be proved in
              order to establish the offense charged in Counts 2 through 5
              of the indictment:

                             First: That there was a scheme or artifice to
              defraud or to obtain money or property by false and
              fraudulent pretenses, representations or promises, as
              alleged in the indictment;
                             Second: That the defendant knowingly and
              willfully participated in the scheme or artifice to
              defraud, with knowledge of its fraudulent nature and with
              specific intent to defraud; and
                             Third: That in execution or in furtherance of
              that scheme, the use of the interstate wires occurred as
              specified in the indictment.

                     The unlawful offense is complete when the three
              separate elements, just stated, are proved beyond a reasonable
              doubt. Unless the government proves beyond a reasonable
              doubt that every element of an offense with which a defendant
              has been charged has been committed, you must find that
              defendant not guilty.

       Certainly the evidence showed, prima facie, that Kalyvas and Dass, knowingly and

willfully, participated in a scheme to defraud Kirkpatrick and Feldspar of $100,000 and

that, in so doing, they used interstate wire communication. Kalyvas, acting for Dass,

received $100,000 from Kirkpatrick in return for which Dass was to obtain a so-called

“guarantee bond,” for Kirkpatrick and Feldspar. In obtaining such bond, Dass would use

$90,000, with the remaining $10,000 to be a non-refundable fee for Kalyvas and Dass.

The agreement went on to provide that if no guarantee bond could be obtained, the

$90,000 would be promptly returned to Kirkpatrick. Within days after the $100,000 was

placed by Kirkpatrick in Kalyvas’ trustee account in Florida, virtually the entire $100,000

                                           -8-
was withdrawn by Kalyvas and used for personal purposes by himself and Dass. No

guarantee bond was ever obtained and no part of the $100,000 was ever returned. Such,

to us, is a classic case of a scheme to defraud.

       We do not need to be here concerned with whether Kalyvas had any “duty” to

disclose to Kirkpatrick the criminal history of Dass. A failure to thus disclose was not an

essential element of Count 5, and the fact that he may have had no duty to thus disclose

does not preclude his conviction on Count 5. Testimony as to what Kalyvas told

Kirkpatrick in their conversations leading up to Kirkpatrick’s giving Kalyvas $100,000

for delivery to Kalyvas’ trustee account for Dass was of course admissible evidence. And

what Kalyvas did not tell Kirkpatrick about Dass’ background is arguably evidence of an

intent to defraud, even though such was not an essential element of any count of the

indictment.

       Counsel next argues that the evidence is legally insufficient to sustain Kalyvas’

conviction on Count 5, stating that “well established judicial precedent removes routine

communications of attorneys from the scope of mail and wire fraud statutes when the

attorney is not a principal to the transaction in question, the communication is sent within

the scope of the representation and the communication contains no inherent falsehoods or

misstatements of fact.” This argument misses the mark.

       The government’s evidence established, prima facie, that Kalyvas used an

interstate wire communication on August 17, 1993 to effectuate a “Contingent Consulting

                                             -9-
Agreement” between Kirkpatrick and Dass. Pursuant to that agreement, it is agreed that

Kirkpatrick transmitted by wire $100,000 from Oklahoma to Kalyvas’ trustee account in

Florida on August 17, 1993. And the very damning fact is that within days thereafter,

Kalyvas withdrew virtually the entire $100,000 which was spent for personal use by

Kalyvas and Dass, and not for the purposes contemplated by the “Contingent Consulting

Agreement.” Kalyvas’ use of the interstate wire communication alleged in Counts 4 and

5 seeking extensions of time within which to obtain a “guarantee bond” or return the

$90,000 were obviously for the purpose of concealing the fact that not only had they

failed to obtain a “guarantee bond,” but, more importantly, there no longer was $90,000

with which to obtain such a bond. The purpose of these extension requests was to further

the fraud by concealing the fact that the $100,000 had long ago been converted to the

defendants’ personal use. In sum, the evidence supports Kalyvas’ conviction on Count 5.

       As indicated, Kalyvas was convicted on Count 5 only, and was acquitted on

Counts 1, 2, 3, and 4. Counsel suggests that the jury’s verdicts are legally inconsistent to

the end that Kalyvas’ conviction on Count 5 must be vacated and set aside. In thus

arguing, counsel states that he is not “unmindful” of the Supreme Court’s

pronouncements in United States v. Powell, 469 U.S. 57 (1984) and Dunn v. United

States, 284 U.S. 390 (1932), but argues that the instant case is distinguishable from those

cases. We think not.

                                            - 10 -
       In Dunn, the defendant was charged on a first count with maintaining a common

nuisance by keeping for sale at a specified place intoxicating liquor, in a second count

with the unlawful possession of intoxicating liquor, and in a third count with the unlawful

sale of such liquor. The Supreme Court characterized the evidence adduced at trial as

being “the same for all the counts.” Dunn, 284 U.S. at 392. A jury convicted Dunn on

Count 1 but acquitted him on Counts 2 and 3. In rejecting Dunn’s argument that the three

verdicts were legally inconsistent, the Supreme Court, speaking through Justice Holmes,

held that “[c]onsistency in the verdict is not necessary” and noted that the “verdict may

have been the result of compromise, or of a mistake on the part of the jury. . .,” and then

added that “verdicts cannot be upset by speculation or inquiry into such matters.” Dunn,
284 U.S. at 393-94.

       In Powell, the defendant was acquitted of conspiring to possess cocaine with intent

to distribute and possession with intent to distribute cocaine but convicted on three counts

charging her with using an interstate telephone call to facilitate the conspiracy to possess

with intent to distribute and possession with intent to distribute cocaine. The Supreme

Court in Powell followed Dunn and refused to create an exception thereto where the jury

acquitted a defendant on a predicate felony, but convicts on the compound felony. In so

doing, the Court spoke as follows:

              The rule that the defendant may not upset such a verdict
              embodies a prudent acknowledgment of a number of factors.
              First, as the above quote suggests, inconsistent verdicts-even
              verdicts that acquit on a predicate offense while convicting on

                                            - 11 -
              the compound offense-should not necessarily be interpreted as
              a windfall to the Government at the defendant’s expense. It is
              equally possible that the jury, convinced of guilt, properly
              reached its conclusion on the compound offense, and then
              through mistake, compromise, or lenity, arrived at an
              inconsistent conclusion on the lesser offense. But in such
              situations the Government has no recourse if it wishes to
              correct the jury’s error; the Government is precluded from
              appealing or otherwise upsetting such an acquittal by the
              Constitution’s Double Jeopardy Clause.2 (Citations omitted).

Powell, 469 U.S. at 65.

       In this general regard we note that Kalyvas is wheelchair bound because of

multiple sclerosis, and in acquitting him on Counts 1 through 4, the jury could

understandably have been influenced by lenity.

       Counsel also asserts that the district court erred in denying Kalyvas’ motion to

sever his trial from Dass’ trial. This is particularly true, says counsel, because of the

extensive evidence of “other transactions” which, under Fed. R. Evid. 404(b) was

admissible, even though Kalyvas himself was not involved in all the “other transactions.”

In this latter regard, Kalyvas was involved in many of the “other transactions,” though

admittedly, not all.

       Be that as it may, we find no abuse of discretion by the district court in denying the

motion for a severance. Persons jointly indicted are generally to be tried together and a

       2
        In United States v. Morehead, 959 F.2d 1489, 1503 (10th Cir. 1992), we
recognized the Supreme Court’s holding in Powell “that an inconsistent verdict is not a
basis for reversal.”

                                            - 12 -
defendant has a considerable burden to demonstrate prejudice stemming from a joint trial.

See Zafiro v. United States, 506 U.S. 534 (1993) and United States v. Edwards, 69 F.3d
419, 434 (10th Cir. 1995), cert. denied, 116 S. Ct. 2497 (1996). Here, Kalyvas and Dass

were operating “hand in glove,” so to speak, in their dealings with Kirkpatrick, all of

which suggests a joint trial. In sum, we find no abuse of discretion on the part of the trial

court in denying Kalyvas’ motion for a severance.

       The remaining matters urged by counsel in his brief as grounds for reversal,

though not pursued at oral argument, have been considered and in our view none warrants

a reversal. Accordingly, Kalyvas’ conviction and sentence are affirmed.

                                            DASS3

       Not surprisingly, Dass’ statement of the facts differs from Kalyvas’ statement of

the facts. All of which, however, is of little consequence, since on appeal Dass does not

in any way challenge the sufficiency of the evidence to support his five convictions.

       In this court, Dass’ initial argument is that the district court erred in admitting into

evidence at trial tape recordings of telephone conversations he had with Kalyvas when he,

Dass, was incarcerated at a penal institution in Texas. Counsel argues that Title III of the

       3
        On this appeal, Dass is represented by the Federal Public Defender’s office for the
State of Colorado. After briefing, Dass filed a motion to be allowed to file a
supplemental pro se brief. That motion is denied, without prejudice to his being
permitted to file a pro se petition for rehearing, if he be so inclined.

                                             - 13 -
Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. §§ 2510-21 generally

forbids recording of wire, oral or electronic communications, including telephone

conversations, without a warrant. However, counsel concedes that Title III does not

apply to prisoners’ conversations on institutional telephones when the inmate has

knowledge and consents, impliedly or expressly, that his calls may be monitored, or when

such monitoring constitutes “law enforcement acting in the ‘ordinary course of duties’.”

In the instant case, after hearing, the district court denied Dass’ motion to suppress the

use at trial of the recordings of his telephone conversations with Kalyvas, holding that

Dass had at least impliedly consented to having his telephone conversations monitored

and recorded, and, alternatively, that such fell within the “law enforcement” exception to

Title III. We are not inclined to disturb that ruling.

       The penal institution wherein Dass was then confined gave all inmates notice that

personal calls of this sort could be monitored and recorded. On appeal, counsel does not

really challenge the district court’s holding that Dass consented to the monitoring of his

calls, and argues only that the consent exception to Title III should not apply because the

monitoring was not “random.” With this we do not agree. Indeed, it would appear that

the initial monitoring of Dass’ calls was random, but that, when suspicions were aroused

by the frequency and nature of the calls, the monitoring understandably escalated. The

district court did not err in denying Dass’ motion to suppress the use at trial of his

telephone conversations with Kalyvas. See United States v. Feekes, 879 F.2d 1562, 1565

                                             - 14 -
(7th Cir. 1989), United States v. Amen, 831 F.2d 373, 379 (2nd Cir. 1987), cert. denied,

485 U.S. 1021 (1988), and United States v. Paul, 614 F.2d 115 (6th Cir. 1980), cert.

denied, 446 U.S. 941 (1980).4

       Dass next argues that the district court erred in admitting into evidence testimony

concerning “other transactions” under Fed. R. Evid. 404(b). We find no error in this

regard. The other transactions were similar to the transaction here involved, i.e., an

“advance fee” to purchase a “guarantee bond.” Certainly the “other transactions” tended

to show intent, and state of mind, and the jury was so instructed.

       Counsel next argues that the sentence imposed by the district court should be

vacated because Dass was not given his right of allocution prior to sentencing, as required

by Fed. R. Crim. P. 32(c)(3)(C), nor did the district court make any finding as to Dass’

ability to make restitution, and for the further reason that Dass was orally ordered to make

restitution in the amount of $25,000, whereas the formal written judgment provided for

restitution in the amount of $75,000.

       It is apparently agreed that Dass was not afforded an opportunity to allocute before

being sentenced. In United States v. Gardner, 480 F.2d 929 (10th Cir. 1973), cert.

denied, 414 U.S. 977 (1973), we held that the failure of a district court to follow Rule 32

can be raised on direct appeal, and that “such failure” is error. See also, United States v.

      We are not here concerned with the monitoring of telephone conversations
       4

between a prison inmate and his attorney in a true attorney-client relationship.

                                            - 15 -
Archer, 70 F.3d 1149, 1151 (10th Cir. 1995) and United States v. Muniz, 1 F.3d 1018,

1025 (10th Cir. 1993), cert. denied, 510 U.S. 1002 (1993). In our case, the district court

simply did not comply with Fed. R. Civ. P. 32(c)(3)(C) before imposing sentence. The

fact that after sentencing Dass may have indicated to counsel that he did not wish to make

any statement to the district court before being sentenced does not excuse the district

court’s non-compliance with the rule. Dass’ motion to strike counsel’s affidavit in

appellee’s appendix is, however, denied. Therefore the entire sentence imposed by the

district court is vacated and the case is remanded for resentencing. Dass’ other challenges

to his sentence may be urged at resentencing. Dass’ convictions, however, are hereby

affirmed.

                                          ENTERED FOR THE COURT

                                          Robert H. McWilliams
                                          Senior Circuit Judge

                                           - 16 -