U.S. v. Moser

• Decision Date: 18 September 1997
• Docket Number: No. 96-10464,96-10464
• Citation: 123 F.3d 813
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Steven P. MOSER; Lavoyd Wayne Dollar; Franklin Rollin Johnston; Billy Mack O'Neill; Jerry Lynn Wilkins; Thomas D. Gandy, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 813

123 F.3d 813

UNITED STATES of America, Plaintiff-Appellee, v. Steven P. MOSER; Lavoyd Wayne Dollar; Franklin Rollin Johnston; Billy Mack O'Neill; Jerry Lynn Wilkins; Thomas D. Gandy, Defendants-Appellants.

No. 96-10464.

United States Court of Appeals Fifth Circuit.

Sept. 18, 1997.

Rehearing Denied Oct. 17, 1997.

Susan B. Cowger, Andrea H. Pustejovsky, Thomas B. Hamilton, Assistant U.S. Attorney, Dallas, TX, for Plaintiff-Appellee.

Ronald L. Goranson, Dallas, TX, for Steven P. Moser.

Dennis Gerald Brewer, Sr., Irving, TX, John Davidson Nation, John Almon Williamson, Dallas, TX, John Matthew Anthony, Brewer & Brewer, Irving, TX, for Lavoyd Wayne Dollar.

Imhotep Alkebu-lan, Dallas, TX, for Franklin Rollin Johnston.

Mark Ryan Lippman, LaJolla, CA, for Billy Mack O'Neill.

Jerry Lynn Wilkins, Dallas, TX, pro se.

Timothy William Crooks, Fort Worth, TX, for Thomas D. Gandy.

Appeals from the United States District Court for the Northern District of Texas.

Before GARWOOD, BENAVIDES and STEWART, Circuit Judges.

BENAVIDES, Circuit Judge:

This direct criminal appeal involves six appellants who challenge, among other things, the sufficiency of the evidence to support their convictions, the jury instructions, the legality of the search, and the district court's denial of their motion to sever the trial. Finding no error, we affirm.

I. FACTS AND PROCEDURAL HISTORY

In February of 1986, Appellant Franklin Rollin Johnston (Johnston) was engaged in the real estate business and suffered severe financial losses. Johnston attributed those losses on the downturn of the real estate market, oil business, and ultimately, the failure of the banks. After attending various seminars and conducting research, he became convinced that the Federal Reserve Act was illegal inasmuch as banks were creating money out of thin air and lending only their "credit."

After having met Appellant Billy Mack O'Neill (O'Neill) in March of 1993, Johnston happened to meet O'Neill at a meeting involving the subjects of banking and money in May of 1993. O'Neill gave Johnston a packet of materials generated by the "Family Farm Preservation" entity of Tigerton, Wisconsin. The packet contained several court cases, blank "certified money orders" (CMOs), and articles explaining that banks legally cannot loan credit. The CMOs provided that they were payable:

on demand, money of account of the United States, as required by law in Sect. 20 of Coinage Act of 1792 from the time of official determination of the substance of said money: or, in U.C.C. 1-201(24) Credit Money.

The money order further provided that it was redeemable at full face value when presented to L.A. Pethahiah in Tigerton, Wisconsin. If a financial institution presented the money order to Pethahiah, the institution would then receive a certified banker's check (CBC) in the same amount as the CMO. The CBC also contained the above limiting language.

Johnston gave the packet of materials to Appellant Jerry Lynn Wilkins (Wilkins), an attorney who Johnston had previously retained to do some work. Wilkins examined the materials and then advised Johnston, who in turn advised O'Neill, that he agreed with the information in the packet.

Johnston then formed USA First, an unincorporated business organization in Waxahachie, Texas. Appellant Lavoyd Wayne Dollar (Dollar), a businessman and long time friend of Johnston, owned office space in Waxahachie and rented a suite of offices to Johnston for USA First. O'Neill worked for USA First, and Wilkins moved his law office to the offices of USA First. Johnston paid Wilkins $500 each week for the work he did for USA First. Each of those four men used CMOs from the Tigerton packet in an attempt to pay off debts with various lenders.

Shortly thereafter, Johnston put together a packet almost identical to the Wisconsin packet and began to sell it out of the offices of USA First for $300. The packet instructed that the user could fill out the six enclosed CMOs in any amount to pay off particular debts. Like the Wisconsin CMOs, these CMOs contained the above-quoted limiting language. The packet instructed the user to include 2-3 months extra interest and to ask for return of any overpayment. The institution to which a CMO was sent by certified mail was instructed to forward the CMO for redemption to O.M.B.-W.D. McCall at a post office box in Waxahachie. ¹ The institution would then receive in return an item entitled "certified banker's check" (CBC) in the same amount as the CMO. The CBC would be signed by O'Neill. The institution was instructed to credit the CBC to the debtor's account. When the CBC was returned to USA First, O'Neill would stamp it "paid in full." There was no money behind the CMOs or CBCs. The packet itself referred to the CMOs as "pretend money."

The Texas Department of Banking sent a cease and desist letter to O.M.B.-W.D McCall, admonishing that it had information that the business was violating state law regarding the unlicensed sale of payment instruments. The letter explained that such a violation was a third degree felony. The warning in the letter was ignored, and USA First continued to sell the packets containing the CMOs. ²

In December of 1993, the offices of USA First were searched and records were seized. Shortly thereafter, Leo Hoad (Hoad) began working for USA First. Apparently, O'Neill and Hoad had some differences, and as a result, O'Neill left USA First.

Meanwhile, Appellant Steven P. Moser (Moser), who owned several pieces of mortgaged real property in Pennsylvania, was experiencing financial difficulties and, through a friend, heard of USA First in Texas. Moser subsequently talked with Johnston and purchased a packet. He used several of the CMOs in an effort to discharge his debt.

Appellant Thomas D. Gandy (Gandy) learned of USA First through a trust company employee in Kansas. Gandy purchased a packet, and used the CMOs as payments for existing loans. All six appellants attempted to use the CMOs. Ultimately, over 800 CMOs were issued by O.M.B.-W.D. McCall with a purported face value of over $61 million.

A grand jury charged the six appellants with one count of conspiracy to commit mail fraud and several substantive counts of mail fraud in violation of 18 U.S.C. §§ 371, 1341, and 2. The jury found Wilkins, Johnston, Dollar, and O'Neill guilty as charged. The jury acquitted both Moser and Gandy of conspiracy but found Moser guilty of one substantive count of mail fraud and found Gandy guilty of two substantive counts of mail fraud.

The district court sentenced the appellants as follows: Johnston and Wilkins, 96 months; Dollar and Moser, 21 months; O'Neill, 70 months; Gandy, 4 months and 16 days.

II. ANALYSIS

A. SUFFICIENCY OF THE EVIDENCE

All the appellants argue that the evidence is insufficient to sustain their convictions. ³ Johnston, Wilkins, and Dollar were convicted of one count of conspiracy to commit mail fraud in violation of 18 U.S.C. § 371 and substantive counts of mail fraud in violation of 18 U.S.C. § 1341 (Johnston, two counts; Wilkins, seven counts; and Dollar, five counts). Gandy and Moser were acquitted of the conspiracy count but convicted of mail fraud (Gandy, two counts; Moser, one count).

When reviewing the sufficiency of the evidence, this Court views all evidence, whether circumstantial or direct, in the light most favorable to the Government with all reasonable inferences to be made in support of the jury's verdict. United States v. Salazar, 958 F.2d 1285, 1290-91 (5th Cir.), cert. denied, 506 U.S. 863, 113 S.Ct. 185, 121 L.Ed.2d 129 (1992). The evidence is sufficient to support a conviction if a rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Id. The evidence need not exclude every reasonable hypothesis of innocence or be completely inconsistent with every conclusion except guilt, so long as a reasonable trier of fact could find that the evidence established guilt beyond a reasonable doubt. United States v. Faulkner, 17 F.3d 745, 768 (5th Cir.), cert. denied, 513 U.S. 870, 115 S.Ct. 193, 130 L.Ed.2d 125 (1994).

To prove a violation of the mail fraud statute, 18 U.S.C. § 1341, the Government must prove beyond a reasonable doubt that there was (1) a scheme or artifice to defraud, (2) specific intent to commit fraud, and (3) use of the mails for the purpose of executing the scheme to defraud. United States v. Shively, 927 F.2d 804, 813-14 (5th Cir.), cert. denied, 501 U.S. 1209, 111 S.Ct. 2806, 115 L.Ed.2d 979 (1991). "Intent to defraud requires an intent to (1) deceive, and (2) cause some harm to result from the deceit." Jimenez, 77 F.3d at 97 (citation omitted). A defendant has the intent to defraud if he acts knowingly with the specific intent to deceive for the purpose of causing pecuniary "loss to another or bringing about some financial gain to himself." Id.

A conviction for conspiracy under 18 U.S.C. § 371 requires the Government to prove beyond a reasonable doubt (1) an agreement between two or more persons, (2) to commit a crime against the United States, and (3) an overt act in furtherance of the agreement committed by one of the conspirators. United States v. Krenning, 93 F.3d 1257, 1262 (5th Cir.1996).

1. Johnston

Johnston argues that his offer of payment in kind is an accepted banking practice and that the CMO and the CBC "could be valid if they had been accepted by the financial institution." He contends that if the bank had accepted the offer of payment he would not have been guilty of mail fraud. He then reasons that as a matter of law he cannot be guilty of conspiracy to commit mail fraud and mail fraud simply because the bank decided not to accept his offer of payment. This argument is specious. The evidence at trial clearly established that the CMOs and CBCs underlying his convictions are worthless. His convictions do not rest on the bank's decision to reject his offer of payment because that is not...