Court Opinion

ID: 9477386
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:22:23.682756+00
Date Added: 2024-06-11T17:45:51.383309
License: Public Domain

RALPH B. GUY, Jr., Circuit Judge,
concurring in part and dissenting in part.
I concur in that part of the court’s opinion on rehearing which reverses the conviction of Shapero and remands for further proceedings.
I adhere to my dissent, however, as it relates to the mail fraud conviction of Runnels. In its opinion on rehearing, the court essentially reiterates the arguments made in the initial opinion except the recent case of Carpenter v. United States, — U.S. —, 108 S.Ct. 316, 98 L.Ed.2d 275 (1987), is cited for further support. My own analysis of Carpenter is that it does not support the court’s conclusion and may well detract from it. Carpenter involves the use by a Wall Street Journal reporter of information he received as an employee of the Journal for the purpose of profiting by playing the stock market. The Supreme Court concluded that the defendant’s conduct violated the mail fraud statute. The court stated:
The Journal, as Winans’ employer, was defrauded of much more than its contractual right to his honest and faithful service, an interest too ethereal in itself to fall within the protection of the mail fraud statute, which “had its origin in the desire to protect individual property rights.” McNally [v. U.S.], supra, [— U.S. —] at —, n. 8, 107 S.Ct., [2875] at 2881, n. 8 [97 L.Ed.2d 292 (1987)]. Here, the object of the scheme was to take the Journal’s confidential business information — the publication schedule and contents of the “Heard” column— and its intangible nature does not make it any less “property” protected by the mail and wire fraud statutes. McNally did not limit the scope of § 1341 to tangible as distinguished from intangible property rights.
Carpenter, 108 S.Ct. at 320.
I have no problem with this reasoning but it is not our case. Although our case involves illegal, fraudulent, unethical, and despicable conduct by union officials, workers, and lawyers, it does not involve a viable mail fraud count as the indictment was drafted. Simply stated, unscrupulous attorneys have been soliciting retiring workers for many years in Michigan and encouraging them to file workers’ compensation claims after they retire whether there is any legitimacy to the claim or not. The practice is lucrative enough that there is competition for it. The lawyers that can get a union official to steer the retirees to them have an edge. Runnels knew this and decided to capitalize on it. This certainly constituted, as the indictment charged, “defrauding] the members of Local 22 ... of the right to have the business of Local 22 conducted honestly ... [and] free from corruption....” Unfortunately, however, that is the intangible-rights theory struck down by McNally.
It is true that the indictment also contains the charge that there was a scheme “to obtain money by means of false and fraudulent pretenses and representations....” If the government had then proceeded to show that some of the workers’ compensation claims subsequently filed were phony and that employers and insurance companies were thus defrauded of money, they would have had a good case. But that was not their theory and they made no attempt to do this. The *912retiring union members are not victims— for the most part they are part of the problem and involved in the scheme. As reprehensible as Runnels’ involvement in all of this may have been, no “property” of the union or union members was involved. I would agree that an “economic benefit” could meet the Carpenter test of intangible “property.” But the indictment did not fairly put Runnels on notice that this type of intangible interest was involved. The only intangible interest charged by the indictment was the kind struck down by McNally.
I do not mean to be critical of the prosecution for proceeding in the manner that it did. When this indictment was filed, pre-McNally, the intangible-rights theory was a perfectly good theory and one that fit this case. It would have been a much more complicated case to prove participation in the filing of fraudulent claims and one that implicates more state concerns than federal.
Since the first opinion in this case was filed, I have re-read the indictment and the jury instructions and it seems even clearer to me than before that the government put all of their eggs in the intangible-rights basket. The court would attempt to counter this, at least in part, by claiming that Runnels defended by saying he did not take any money. In other words, the implication is that since Runnels’ defense was innocence, it does not matter what the theory of the prosecution was since the jury must have found him to have, in fact, taken money. I do not understand this to be the law. The government must charge and convict under a statute whose elements fit the facts regardless of how absurd a defense or what theory of defense is offered. Since under the intangible-rights theory Runnels’ blatant misuse of his official union position would have constituted mail fraud, he had little choice in his defense other than to claim he did not do it. No confession and avoidance argument would have worked.
Accordingly, I must still indicate that I would REVERSE the judgment of conviction of defendant Runnels.