U.S. v. Janusz

Decision Date30 January 1998
Docket NumberNo. 96-1553,96-1553
Citation135 F.3d 1319
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Timothy P. JANUSZ, Defendant-Appellant.
CourtU.S. Court of Appeals — Tenth Circuit

Michael W. Gross (Arthur M. Schwartz, with him on the brief), Arthur M. Schwartz, P.C., Denver, CO, for Defendant-Appellant.

Linda S. Kaufman, Assistant United States Attorney (Henry L. Solano, United States Attorney, with her on the brief), Denver, CO, for Plaintiff-Appellee.

Before BRORBY, EBEL, and KELLY, Circuit Judges.

PAUL KELLY, Jr., Circuit Judge.

Defendant-Appellant Timothy Janusz appeals his conviction and sentence on seven counts of wire fraud, 18 U.S.C. § 1343, arising out of his scheme to defraud an elderly couple who had engaged him to assist in financial and estate planning matters. Mr. Janusz was sentenced to sixty-three months in prison, with three years supervised release, and ordered to pay $184,530.70 in restitution. He contends the district court (1) committed plain error by failing to instruct the jury sua sponte on the defense of good faith; (2) erred in excluding testimony of the content of an overheard telephone conversation; (3) erred in denying Mr. Janusz's motion for judgment of acquittal based on insufficient evidence of wire fraud; (4) miscalculated the amount of loss under USSG § 2F1.1; (5) improperly refused to decrease his offense level for acceptance of responsibility under USSG § 3E1.1; and (6) erred in enhancing his sentence for taking advantage of unusually vulnerable victims under USSG § 3A1.1(b). Our jurisdiction arises under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a)(1), and we affirm.

Background

Late in 1994 Mr. Janusz began to assist Kathleen Huffman with her income taxes. At the time, Mr. Janusz was doing business as a private financial consultant. He had a law degree and claimed to have practiced law in South Dakota. He had been licensed as a certified public accountant in South Dakota and Nebraska, although he allowed these licenses to lapse. He had been granted series sixty-three and series seven securities licenses, and had been employed by a large national accounting firm, where he was in charge of developing the personal financial planning group, involving retirement and estate planning for individuals. He had taught law and business courses at several universities and a law school. He held himself out as a certified public accountant in Colorado.

Ms. Huffman received a substantial income from her grandparents, A. Carl and Bertha Cass. The Casses were eighty-eight years old and lived in Washington, DC. Ms. Huffman told Mr. Janusz that her grandparents had a lot of money and needed help with their estate planning. The Casses were also having increasing difficulty living by themselves in Washington; Mr. Cass was bedridden and entirely unable to handle financial affairs. Mr. Janusz began advising them. He prepared codicils, trust amendments, and other documents which they executed. Ms. Huffman arranged for the Casses to move to Colorado, where she could take care of them. The Casses had purchased a small house for her in Colorado, and Ms. Huffman's plan was for her grandparents to live in that house and to buy her a larger house with acreage next door. Mrs. Cass and Ms. Huffman sent Mr. Janusz a check for $568,000 to buy the larger house, with an additional $175,000 for the adjoining acreage. The $568,000 check did not clear in time for the closing, so another $575,000 was wired to Mr. Janusz so the closing could take place as scheduled. Mr. Janusz deposited the $568,000 check into one of his accounts and promised to return it. He never did. Instead of using the $175,000 to buy the parcel of land, Mr. Janusz executed a promissory note for $90,000 in the name of KMA, Inc., a corporation he had created to protect Ms. Huffman's assets. He spent the remainder, loaning part without authorization to third parties.

When this amount dwindled Mr. Janusz began creating false documents to obtain more money from the Cass and Huffman accounts. Twice he forged Mrs. Cass's signature on letters which he faxed to a Vanguard mutual fund, requesting wires to his account of $320,000 and $250,000, respectively. He cut and pasted her signature from other documents. He called Dreyfus Funds, posing as A. Carl Cass, and requested $250,000 to be transferred to a Cass/Huffman account at Nationsbank. Then he traced Mrs. Cass's signature on a letter to Nationsbank, requesting the $250,000 be transferred to the account of a Montessori school he owned. Neither the Casses nor Ms. Huffman knew of the transfers. In an effort to cover up his fraud, Mr. Janusz created letters purporting to memorialize conversations he'd had with Mrs. Cass; she denied having had any such conversations.

In all Mr. Janusz transferred $2,263,000 to accounts under his control; of this he used approximately $776,399 for authorized purchases and expenses of the Casses and Ms. Huffman. He spent $109,748 for personal use. And he loaned, without authorization, $1,126,029 to third parties. In only two cases did he obtain promissory notes, and these were payable to his Montessori school. After the fraud was discovered he obtained additional promissory notes, still payable to his Montessori school. When the Casses filed a civil suit he assigned the notes to them. The seven counts of wire fraud were based on various wire transfers of money to his accounts and to third-party borrowers, as well as faxed documents requesting unauthorized fund transfers, and the telephone call in which he posed as Mr. Cass.

Discussion
I

Mr. Janusz argues, first, that even though he did not request a good faith instruction at trial, and did not object to the court's failure to give one, it was plain error for the court not to give such an instruction sua sponte. See Fed. R. Cr. P. 52(b). We may correct an error not raised at trial under Rule 52(b) if there is (1) error (2) that is plain and (3) that affects substantial rights. See Johnson v. United States, --- U.S. ----, ---- - ----, 117 S.Ct. 1544, 1548-49, 137 L.Ed.2d 718 (1997) (quoting United States v. Olano, 507 U.S. 725, 732, 113 S.Ct. 1770, 1776-77, 123 L.Ed.2d 508 (1993)). If these three elements are present we may exercise our discretion to notice forfeited error, "but only if (4) the error seriously affect[s] the fairness, integrity, or public reputation of judicial proceedings." Id. at ----, 117 S.Ct. at 1549 (quotation marks omitted; alteration in original). A defendant is entitled to a good faith instruction when he has interposed the defense of good faith, has requested the instruction, and when there is sufficient evidence to support it. See United States v. Hopkins, 744 F.2d 716, 717 (10th Cir.1984).

Mr. Janusz falls short on each element of this standard. Although his failure to request the instruction or object to the court's omission of it triggers our plain error review, see United States v. Brown, 996 F.2d 1049, 1052-53 (10th Cir.1993), it is also relevant to whether error was committed at all. See United States v. Gallup, 812 F.2d 1271, 1279 (10th Cir.1987). We find none.

At trial Mr. Janusz chose to admit his false representations, false pretenses, and pasting of signatures. He emphasized the admissions in both his opening and closing statements. See I Aplee. Supp.App. at 17; VIII Aplee. Supp.App. at 1439. His defense theory was that they were not part of a scheme to defraud but of an estate plan authorized by the Casses and for their ultimate benefit. He chose this trial strategy, declining to ask for the good faith instruction, for good reason. The evidence of his false pretenses was uncontroverted and devastating. 1

It is also clear that Mr. Janusz was not entitled to the instruction because the evidence did not support it. By admitting his false pretenses, Mr. Janusz admitted, as a matter of law, that he did not act in good faith. A defendant's honest belief that a venture will ultimately succeed does not constitute good faith if, in carrying out the plan, he knowingly uses false representations or pretenses with intent to deceive. See United States v. Cochran, 109 F.3d 660, 665 (10th Cir.1997) (quoting United States v. Themy, 624 F.2d 963, 965 (10th Cir.1980); United States v. White, 673 F.2d 299, 304-05 (10th Cir.1982)). Further, a defendant is not entitled to a good faith instruction unless the evidence, if believed, has "the capacity to rebut all evidence of false and misleading conduct, all failures to disclose that which should have been disclosed and all matters that deceive and were intended to deceive another. A benign explanation of only some of the acts is insufficient...." United States v. Smith, 13 F.3d 1421, 1426 (10th Cir.), cert. denied, 513 U.S. 878, 115 S.Ct. 209, 130 L.Ed.2d 138 (1994). The evidence thus precluded the instruction, and the court committed no error in failing to give it. See United States v. Pappert, 112 F.3d 1073, 1076-77 (10th Cir.1997); Smith, 13 F.3d at 1424-26.

II

Mr. Janusz next argues the trial court erred in refusing to allow testimony regarding an intercepted telephone conversation. We review evidentiary rulings for abuse of discretion. See United States v. Reddeck, 22 F.3d 1504, 1508 (10th Cir.1994). Mr. Janusz has failed to preserve this issue for appeal, however, by not making an offer of proof at trial. "Error may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of a party is affected, and ... the substance of the evidence was made known to the court by offer or was apparent from the context within which questions were asked." Fed.R.Evid. 103(a)(2).

Mr. Janusz attempted to elicit testimony from a witness who, in the course of a telephone conversation with Ms. Huffman, was put on hold when Ms. Huffman received an incoming call. Inexplicably, the witness overheard both sides of Ms. Huffman's conversation with the second caller. After testifying to these circumstances, and without any...

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