Court Opinion

ID: 803416
Source: CourtListenerOpinion
Date Created: 2012-06-29 19:10:37+00
Date Added: 2024-06-11T18:00:08.183306
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS
             FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA,             
                Plaintiff-Appellee,
               v.                         No. 11-4859
G. MARTIN WYNN,
             Defendant-Appellant.
                                      
       Appeal from the United States District Court
      for the District of South Carolina, at Anderson.
       G. Ross Anderson, Jr., Senior District Judge.
                   (8:10-cr-01026-GRA-1)

                  Argued: May 15, 2012

                  Decided: June 29, 2012

 Before NIEMEYER, MOTZ, and FLOYD, Circuit Judges.

Affirmed by published opinion. Judge Niemeyer wrote the
opinion, in which Judge Motz and Judge Floyd joined.

                        COUNSEL

ARGUED: Shimica D. Gaskins, COVINGTON & BURL-
ING, LLP, Washington, D.C., for Appellant. Jeffrey Bryan
Wall, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Appellee. ON BRIEF: Catherine C.
Stern, COVINGTON & BURLING, LLP, Washington, D.C.,
2                   UNITED STATES v. WYNN
for Appellant. William N. Nettles, United States Attorney,
Winston D. Holliday, Jr., Assistant United States Attorney,
OFFICE OF THE UNITED STATES ATTORNEY, Colum-
bia, South Carolina, for Appellee.

                          OPINION

NIEMEYER, Circuit Judge:

   G. Martin Wynn, a professional engineer with the engineer-
ing firm of Talbert & Bright, Inc., was convicted of mail fraud
and wire fraud, in violation of 18 U.S.C. §§ 1341 and 1343,
based on his performance of services to Oconee County,
South Carolina, in connection with its project to extend the
runway at the Oconee County Regional Airport. Instead of
procuring a required permit for the runway extension project
from the South Carolina Department of Health and Environ-
mental Control ("DHEC"), Wynn cut a valid permit off of an
older set of plans prepared for a previous airport project and
fraudulently attached that permit to the plans for the runway
extension. He then mailed the fraudulently permitted plans to
Oconee County and later emailed them to the DHEC. Follow-
ing his conviction, the district court sentenced Wynn to 12
months and 1 day in prison and ordered him to pay Oconee
County $118,000 in restitution.

   On appeal, Wynn contends that the district court erred in
instructing the jury on the mail fraud and wire fraud statutes
and that the evidence was insufficient to convict him on the
offenses had they been properly presented to the jury. He also
challenges the district court’s calculation of the amount of
loss found for purposes of sentencing and ordering restitution.

    For the reasons that follow, we affirm.

                               I

  Oconee County contracted with Talbert & Bright, an engi-
neering firm specializing in airports and aviation consulting,
                     UNITED STATES v. WYNN                      3
to prepare site plans and obtain the necessary permits from the
DHEC to execute its project to extend its runway at the Oco-
nee County Regional Airport. Talbert & Bright employees,
notably Al Smith (the project director) and Wynn, were
responsible for preparing the construction plans and obtaining
the necessary permits for the project.

   In April 2009, Wynn drafted a 48-acre storm water and ero-
sion plan for the runway extension. After Al Smith signed off
on the plans, Wynn sent them to Oconee County for approval.
Oconee County approved the plans by issuing a Notice of
Intent ("NOI") to proceed with construction. The normal pro-
tocol thereafter would have been for Talbert & Bright to sub-
mit the plans, together with the County’s NOI, to the DHEC
to obtain the required permit. Although Wynn was charged
with this task, he never completed it.

   Several months later, in October 2009, Oconee County
adjusted the airport runway project slightly to include an addi-
tional 12 acres in the erosion plan, for a total of 60 acres. This
adjustment required adding two pages to the back of the origi-
nal 48-acre plans, which had been 62 pages.

   In November 2009, Smith requested that Wynn send Oco-
nee County a copy of the 48-acre plans stamped with the per-
mit seal from the DHEC. Because Wynn had never procured
a permit for the plans, however, he could not fulfill the
request. Instead of acknowledging this failure, he cut a DHEC
seal off of a set of properly permitted plans that Talbert &
Bright had procured for Oconee County to undertake a previ-
ous project at the airport to improve visibility on the runway.
He then photocopied that seal onto the runway extension proj-
ect plans and sent the fraudulently permitted 48-acre plans to
Oconee County by mail. Kevin Short, the Airport Director
who received Wynn’s submission, understood that the County
needed an adjusted permit for the revised 60-acre plans and
could not simply rely on the original 48-acre plans, even if
they had been properly permitted. But he testified that he did
4                   UNITED STATES v. WYNN
not realize that the ostensibly permitted plans that he had
received from Wynn were the unrevised, 48-acre version of
the plans. He stated that he conducted only a cursory review
of the plans because "we were paying Talbert & Bright a lot
of money to take care of these things for us," and he "trusted
them."

   In early February 2010, severe rains at the airport caused
extensive runoff of orange-colored water onto adjoining prop-
erties, generating complaints from the airport’s neighbors.
When Airport Director Short inquired of Talbert & Bright
about the problem, three of their officials—Smith, Wynn, and
Jay Talbert—assured Short that the plans were "okay" and
that "the DHEC ha[d] signed off on the plans." But in
response to the complaints, DHEC inspectors also visited the
site, and they asked to see Oconee County’s construction
plans. Oconee County provided the DHEC with the plans
delivered to it by Wynn, which included the fraudulent seal.
Because DHEC only had in its files the plans from the earlier
project to improve visibility at the airport, which did not
match the runway extension work, it decided to investigate
further. When the DHEC asked Wynn to provide a copy of
the plans, he emailed the agency the same fraudulently per-
mitted plans that he had previously mailed to Oconee County.
Discovering the invalid permit, the DHEC forced Oconee
County to cease construction of the runway extension project
until the County acquired a valid permit. This took six
months. Once the permit for the full 60-acre project was
obtained, the County resumed construction of the project.

   Based on Wynn’s transmission of the fraudulently permit-
ted plans to Oconee County by mail in November 2009 and
to the DHEC by email in February 2010, Wynn was indicted
and convicted for mail fraud and wire fraud, in violation of 18
U.S.C. §§ 1341 and 1343. At sentencing, the district court
accepted the government’s submission that the amount of loss
to be used in calculating Wynn’s Sentencing Guidelines range
and restitution amount was $118,000, representing the amount
                     UNITED STATES v. WYNN                      5
of money Oconee County paid to Talbert & Bright in fees
between November 2009, when Wynn submitted the fraudu-
lently permitted plans, and February 2010, when the DHEC
forced Oconee County to stop work on the project. The dis-
trict court sentenced Wynn to 12 months and 1 day in prison
and ordered him to pay $118,000 in restitution.

 From the judgment of conviction, dated August 19, 2011,
Wynn filed this appeal.

                                II

   For his principal argument, Wynn contends that a convic-
tion under the mail fraud and wire fraud statutes, 18 U.S.C.
§§ 1341 and 1343, requires that the government show that
Wynn "intended to harm Oconee County," and that the gov-
ernment failed to prove that Wynn "contemplated or intended
to harm Oconee County." He claims that there was no evi-
dence that he intended "to induce Oconee County to part with
property or undertake some action that it would not otherwise
do absent his misrepresentation or omission." He argues fur-
ther that the district court compounded the problem by
instructing the jury that "intent to defraud" requires a "specific
intent to deceive or cheat someone, usually for personal finan-
cial gain or to cause financial loss to someone else." Focusing
on the court’s use of the word "usually" in connection with
"personal financial gain," he maintains that the district court
allowed his conviction without requiring proof of intent to
harm. Without any proof of intent to harm, Wynn reasons, all
the government was required to show was some form of
deception, and he asserts that clearly the government must
prove more than "mere deception."

   As we show, however, the district court properly instructed
the jury on the elements of the mail fraud and wire fraud
offenses, and the evidence that the government presented at
trial was sufficient for the jury to convict.
6                   UNITED STATES v. WYNN
   Sections 1341 and 1343 of Title 18 punish anyone who,
"having devised or intending to devise any scheme or artifice
to defraud, or for obtaining money or property by means of
false or fraudulent pretenses, representations, or promises,"
uses the mails or electronic wires "for the purpose of execut-
ing such scheme or artifice." 18 U.S.C. §§ 1341 (mail fraud),
1343 (wire fraud). Thus, to convict a person of mail fraud or
wire fraud, the government must show that the defendant (1)
devised or intended to devise a scheme to defraud and (2)
used the mail or wire communications in furtherance of the
scheme. See United States v. Jefferson, 674 F.3d 332, 366
(4th Cir. 2012). And the element "to defraud" has "the com-
mon understanding of wronging one in his property rights by
dishonest methods or schemes and usually signify[ing] the
deprivation of something of value by trick, deceit, chicane, or
overreaching." Carpenter v. United States, 484 U.S. 19, 27
(1987) (internal quotation marks omitted); see also United
States v. Treadwell, 593 F.3d 990, 996 (9th Cir. 2010) ("The
common understanding of the verb ‘to deprive’ is to take
away something, such as property, from another"). To estab-
lish a scheme to defraud, "the government must prove that the
defendant[ ] acted with the specific intent to defraud." United
States v. Godwin, 272 F.3d 659, 666 (4th Cir. 2001) (empha-
sis added).

   Thus, the mail fraud and wire fraud statutes have as an ele-
ment the specific intent to deprive one of something of value
through a misrepresentation or other similar dishonest
method, which indeed would cause him harm. In this way,
Wynn is correct to assume that to convict a person of defraud-
ing another, more must be shown than simply an intent to lie
to the victim or to make a false statement to him. See United
States v. D’Amato, 39 F.3d 1249, 1257 (2d Cir. 1994)
("[M]isrepresentations amounting only to a deceit are insuffi-
cient to maintain a mail or wire fraud prosecution" (internal
quotation marks and alteration omitted)). To be convicted of
mail fraud or wire fraud, a defendant must specifically intend
to lie or cheat or misrepresent with the design of depriving the
                    UNITED STATES v. WYNN                     7
victim of something of value. This specific intent to defraud
is the only mens rea requirement for mail fraud and wire
fraud.

   In this case the district court followed these principles in
instructing the jury. The court stated:

    The defendant can only be found guilty of this crime
    only if the following facts are proved beyond a rea-
    sonable doubt. First, the defendant knowingly
    devised or intended to devise a scheme to defraud or
    to obtain money or property by use of false or fraud-
    ulent pretenses, representations or promises. Second,
    the false or fraudulent pretenses, representations or
    promises were about a material fact. Three, the
    defendant acted with the intent to defraud. And
    fourth, in advancing, furthering, or carrying out the
    scheme to defraud or to obtain money or property by
    means of false or fraudulent pretenses, representa-
    tions or promises, the defendant used [the mails or
    electronic communications].

    Now, the scheme to defraud includes any plans or
    course of action intended to deceive or cheat some-
    one out of money or property using false or fraudu-
    lent pretenses, representations or promises.

                              ***

    The intent to defraud is the specific intent to deceive
    or cheat someone, usually for personal financial gain
    or to cause financial loss to someone else.

Thus, the district court did not allow the jury to find that
Wynn would be guilty of mail fraud and wire fraud by finding
merely that he lied or made a false statement; rather, the court
required that the government prove that the scheme to defraud
"intended to deceive or cheat someone out of money or prop-
8                   UNITED STATES v. WYNN
erty." In telling the jury that the specific intent to defraud or
cheat was "usually for personal financial gain or to cause
financial loss to someone else," the court was merely explain-
ing what motivates an intent to defraud in the usual case. But
this explanation did not withdraw the instruction to the jury
that the scheme to defraud must "include a plan or course of
action intended to deceive or cheat someone out of money or
property," which obviously includes an intent to harm in some
sense. See Treadwell, 593 F.3d at 997 ("The intent to induce
one’s victim to give up his or her property on the basis of an
intentional misrepresentation causes ‘harm’ by depriving the
victim of the opportunity to weigh the true benefits and risks
of the transaction, regardless of whether or not the victim will
suffer the permanent loss of money or property").

   Deliberating under these instructions, the jury reasonably
found Wynn guilty based on the evidence presented at trial,
which at this stage we take in the light most favorable to the
government. See United States v. Kelly, 510 F.3d 433, 440
(4th Cir. 2007). Wynn admits that the evidence shows that he
intentionally cut a DHEC permit from a properly permitted
set of plans and fraudulently pasted it onto the non-permitted
plans he sent to Oconee Airport (by mail) and to the DHEC
(by electronic means). The explanation for such conduct
offered by the government at trial was that Wynn intended to
deceive Oconee County and the DHEC into believing that the
plans had been properly permitted so that the DHEC would
not interfere with construction and the County would continue
construction and continue to pay Talbert & Bright’s fees. The
evidence established that Wynn knew that the plans for the
runway project required a permit; that Oconee County was
expecting his company to procure the proper permits for the
plans; that Oconee County was paying Talbert & Bright to
perform these services; and that his fraudulent seal would
likely mislead Oconee County and the DHEC into believing
that his plans had been legitimately permitted. Thus, the evi-
dence established that Wynn had a specific intent to deprive
Oconee Airport of money and to alter the decisionmaking by
                     UNITED STATES v. WYNN                      9
Oconee County and the DHEC about the project by depriving
them of the knowledge that Wynn had failed to procure a
proper permit for the project.

   We conclude that this provided ample evidence from which
a reasonable jury could conclude, beyond a reasonable doubt,
that Wynn intended to devise a scheme to defraud the County
and the DHEC, in violation of the mail fraud and wire fraud
statutes.

                               III

   Wynn next contends that the evidence was insufficient to
support a finding that his misrepresentation of the plans was
a material misrepresentation because "Oconee County had
already begun construction pursuant to a set of subsequently
developed plans [for the 60-acre project]." Thus, according to
Wynn, "the outdated and superseded plans [for the 48-acre
project] that included the false seal . . . could not have been
a material falsehood." Moreover, Wynn asserts that even if
Oconee County did rely on his fraudulently permitted plans
[for the 48-acre project], it did so unreasonably. In short,
Wynn argues that his misrepresentation was not material and
that it was not reasonably relied on.

    The test for materiality of a false statement is whether the
statement "has a natural tendency to influence, or is capable
of influencing" its target. Neder v. United States, 527 U.S. 1,
16 (1999) (internal quotation marks and alteration omitted);
see also United States v. Sarihifard, 155 F.3d 301, 307 (4th
Cir. 1998) (restating the test as whether the misrepresentation
"might have influenced [the target’s] decision" (emphasis
added)). Of course this "test is unquestionably satisfied when
. . . the defendant’s falsehoods did in fact influence [their tar-
get]," because "[a]ctually influencing [the target] is proof pos-
itive that a statement is capable of influencing [the target] to
act." United States v. Garcia-Ochoa, 607 F.3d 371, 378 (4th
Cir. 2010).
10                  UNITED STATES v. WYNN
   The evidence in this case overwhelmingly supports the con-
clusion that Oconee County actually relied on Wynn’s mis-
representation. The County authorized construction of the
project on the belief that Talbert & Bright had obtained or
was obtaining the necessary permit, a belief that was con-
firmed when, in November 2009, it received the permitted
plans from Wynn. It is true that the contractor had been work-
ing with plans that had been provided to it earlier, as approved
by the County in April 2009 and as had been later amended
by change order to add the 12 acres. But its authorization to
work was based on the County’s belief that proper permitting
was not an issue. Airport Director Short testified that upon
receiving the permitted plans in November, he conducted only
a cursory review of them and did not realize the discrepancy
of the two omitted additional pages in the 62-page document
—the only difference between the original 48-acre plans and
the revised 60-acre plans. He explained in his testimony that
he did not feel a need to review the plans because he trusted
that Talbert & Bright had performed its job competently and
that its job included obtaining the permits for the project. We
readily conclude that these facts showing the County’s actual
reliance on Wynn’s misrepresentations of necessity allowed
the jury reasonably to conclude that Wynn’s misrepresenta-
tions had a "natural tendency to influence" or were "capable
of influencing" Oconee County into believing that it had a set
of validly permitted plans with which to proceed with con-
struction of its runway extension project, thus satisfying the
materiality test.

   Wynn’s argument that the County’s reliance on the repre-
sentations was unreasonable is trumped by the established test
for materiality, which inquires only whether the representa-
tions had a natural tendency to influence or was capable of
influencing its target. Neder, 527 U.S. at 16. The Supreme
Court has been clear that "the common law requirement of
‘justifiable reliance’ . . . plainly has no place in the federal
fraud statutes." Id. at 24-25.
                    UNITED STATES v. WYNN                     11
                               IV

   Wynn next contends, with respect to his wire fraud convic-
tion, that the government "failed to prove that [he] used inter-
state wires to deceive Oconee County, the alleged victim,"
because he "emailed the 48-acre plan to DHEC, not Oconee
County." He concludes that the government’s evidence as to
wire fraud thus "lacks convergence."

   Because Wynn never advanced this argument in the district
court, we review it for plain error. See Fed. R. Crim. P. 52(b);
United States v. Claridy, 601 F.3d 276, 285 (4th Cir. 2010).
Under the plain error standard, we must find, among other
things, that there was error and that the error was plain. In the
circumstances here, we can find neither. Our court has never
addressed the convergence argument, and the other circuits
are split on the issue. Compare, e.g., United States v. McMil-
lan, 600 F.3d 434, 450 (5th Cir. 2010) ("[T]he deception of
regulatory agencies for the purpose of allowing victimization
of third parties is a cognizable mail fraud offense"), with
United States v. Evans, 844 F.2d 36, 39 (2d Cir. 1988) ("If a
scheme to defraud must involve the deceptive obtaining of
property, the conclusion seems logical that the deceived party
must lose some money or property"). It is therefore apparent
that the issue has not been resolved plainly.

   Moreover, on the facts of this case we do not even find
error. There was ample evidence to support the conclusion
that Wynn’s transmission of the fraudulently permitted plans
by wire to the DHEC was an attempt to lull state regulators
into ignoring his fraud and to forestall the agency’s discovery
of it by Oconee County. This type of deception of the State
easily fits within the scope of a scheme to defraud the County.
See United States v. Painter, 314 F.2d 939, 943 (4th Cir.
1963) ("[C]ommunications having a propensity to lull and
forestall action on the part of the victims may form an integral
part of the overall scheme to defraud"). By wiring the fraudu-
lently permitted plans to the DHEC, Wynn intended to
12                  UNITED STATES v. WYNN
accomplish, and did accomplish, his scheme to have the proj-
ect continue, the same objective furthered by his mailing of
the fraudulently permitted plans to Oconee County. Thus,
both the mailing and the wiring of the plans were undertaken
with the ultimate goal of continuing to deceive Oconee
County and to have the project go forward with the resulting
payment of fees to Talbert & Bright.

                               V

  Finally, Wynn contends that the district court improperly
calculated the loss amount used to determine his sentence,
both with respect to calculating the appropriate Sentencing
Guidelines range and the amount of loss for restitution.

   The district court found that the amount of loss resulting
from Wynn’s scheme was $118,000, the amount of invoices
paid by Oconee County to Talbert & Bright during the period
when the project continued as a result of the fraud—between
November 2009 (the month in which Wynn sent the fraudu-
lent permit to Oconee County) and February 2010 (the month
in which Wynn’s fraud was discovered). We review the
court’s finding for clear error. See United States v. Mehta, 594
F.3d 277, 281 (4th Cir. 2010).

   Wynn argues that the amount is "grossly" exaggerated
because "only $11,640 of the invoices [during that period]
relate to ‘Plan Revisions, Coordination, and Permit
Modifications’—the subject of the fraud—whereas the
remainder can be attributed to other tasks undertaken by Tal-
bert & Bright, including construction administration and grant
management."

   The district court agreed with the government’s position
that the full amount Oconee County paid on the contract from
the beginning of the fraud until its discovery should be
restored because it was Wynn’s fraud that led Oconee County
to continue paying Talbert & Bright and to proceed with all
                     UNITED STATES v. WYNN                     13
aspects of the work. Moreover, the amount may have been
conservative because, by depriving Oconee County of a valid
permit—and lying about it—Wynn effectively deprived the
County of many further benefits from the related construction
and grant work. Moreover, once Oconee County discovered
the invalidity of the permit, it was forced to discontinue con-
struction of its project for months.

    We conclude that the district court did not clearly err in its
factual finding. The loss caused to Oconee County by Wynn’s
fraudulent conduct cannot be restricted to money paid specifi-
cally for permitting services and isolated from the other
aspects of the work performed by Talbert & Bright under the
contract. In claiming total expenditures made in reliance on
the fraudulent approval, it is notable that the government did
not attempt to claim other losses to Wynn arising out of the
six-month shutdown of the construction project, the ensuing
litigation, or the losses arising from the later permitting work,
all of which arguably resulted from the discovery of Wynn’s
fraud. The district court "need only make a reasonable esti-
mate of the loss," U.S.S.G. § 2B1.1 cmt. n.3(C), and its award
of the full amount invoiced by Talbert & Bright and paid by
Oconee County during the period of Wynn’s fraud, i.e.,
between November 2009 and February 2010, was a reason-
able estimate of the loss attributable to the fraud.

                               ***

  The judgment of the district court is accordingly

                                                    AFFIRMED.