U.S. v. Frank

• Decision Date: 10 December 1997
• Docket Number: 96-1780,Docket Nos. 96-1775
• Citation: 156 F.3d 332
• Parties: UNITED STATES of America, Appellee, v. Susan FRANK and Jane Frank Kresch, Defendants-Appellants.
• Court: U.S. Court of Appeals — Second Circuit

Page 332

156 F.3d 332

UNITED STATES of America, Appellee, v. Susan FRANK and Jane Frank Kresch, Defendants-Appellants.

Docket Nos. 96-1775, 96-1780.

United States Court of Appeals, Second Circuit.

Argued Dec. 10, 1997. ^*

Decided Sept. 15, 1998.

Richard A. Greenberg, Newman & Schwartz, New York City (Karl E. Pflanz, Steven Y. Yurowitz), for Defendant-Appellant Susan Frank.

Gerald B. Lefcourt, New York City (Richard Ware Levitt), for Defendant-Appellant Jane Frank Kresch.

Leslie Cornfield, Assistant United States Attorney for the Eastern District of New York, Brooklyn, NY (Zachary W. Carter, United States Attorney for the Eastern District of New York, David C. James, Assistant United States Attorney), for Appellee.

Before: CABRANES, Circuit Judge, and PARKER, ^** District Judge.

PER CURIAM:

Susan Frank and Jane Frank Kresch appeal from judgments entered by the United States District Court for the Eastern District of New York (Jack B. Weinstein, Judge ) convicting them, after a jury trial, of conspiracy to commit mail fraud, in violation of 18 U.S.C. §§ 371 and 1341. ¹ The district court sentenced Frank principally to three years of probation, including eight months of home confinement, and a $10,000 fine. It sentenced Kresch principally to a term of imprisonment of one year and one day, two years of supervised release, and a $10,000 fine. The appellants' principal claims on appeal are: (1) that there was insufficient evidence of an intent to commit mail fraud; (2) that the district court erred in its instruction on "intent to defraud;" (3) that the district court's overt act instruction constructively amended the indictment; and (4) that the district court's statute of limitations instruction impermissibly allowed the jury to convict the appellants on the basis of a potentially time-barred conspiracy.

We affirm.

I.

We describe below the evidence before the jury, which we are required to view in the light most favorable to the government. See Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942); United States v. LaBarbara, 129 F.3d 81, 82 (2d Cir.1997). Frank and Kresch were the comptroller and "sludge coordinator," ² respectively, of General Marine Transport Corporation ("General Marine"). For many years, including the period from January 1988 through January 1989, General Marine contracted with various municipalities in New York and New Jersey to transport raw sewage sludge by barge for disposal at sea. In keeping with federal regulations that were phased in during 1987 and took effect took effect in 1988, the contracts called for General Marine to dispose of the waste at a site 106 miles from shore. Prior to 1987, federal law had required that sewage sludge be disposed of only 12 miles from shore. As a result of the new legal requirement, General Marine's municipal customers paid two to four times more for disposal at the 106-mile site.

Throughout 1988, General Marine's barges routinely dumped sludge in waters well short of the 106-mile site. Nonetheless, General Marine billed its municipal customers--by mail--as if the sludge were being dumped in accordance with General Marine's contractual and legal obligations. Both Frank and Kresch were actively involved in General Marine's billing practices. Moreover, for the purpose of concealing General Marine's "short-dumping," both defendants participated in the falsification of billing-related records.

Based on the practices described above, an indictment returned on July 1, 1993 charged the appellants and others with conspiracy to defraud various public entities in New York and New Jersey, in violation of 18 U.S.C. §§ 371 and 1341. The indictment also charged the appellants and others with several environmental crimes. Judge Edward Korman, to whom the case was initially assigned, severed the environmental crime counts and tried those counts first; the appellants were acquitted. The appellants were then tried before Judge Weinstein on the single count of conspiracy to commit mail fraud and were convicted. ³ This appeal followed.

II.

A. Sufficiency of the Evidence

The appellants' first claim is that there was insufficient evidence to support their convictions for conspiracy to commit mail fraud because the government purportedly failed to prove that the appellants had any intent to harm their municipal customers. See United States v. D'Amato, 39 F.3d 1249, 1257 (2d Cir.1994) (18 U.S.C. § 1341 requires that the government prove that the defendant contemplated some actual harm or injury to the victim). The appellants maintain that the municipalities got precisely what they bargained for--sludge disposal--and that, accordingly, the appellants neither intended nor caused the municipalities any harm. The appellants premise their argument on the assertion that it was irrelevant to the municipalities that not all of the sludge was dumped at the 106-mile site. This challenge to the sufficiency of the evidence "faces a heavy burden, because we must view the evidence in the light most favorable to the government and ask only whether a rational jury could find beyond a reasonable doubt" that the appellants intended or contemplated some harm to the municipalities. LaBarbara, 129 F.3d at 84. We believe that the appellants have failed to meet that heavy burden here and that there was ample evidence to support the appellants' convictions.

A defendant who has used the mails fraudulently to bill a customer for services that have not been provided may not defeat a mail fraud charge simply by providing alternative services. See United States v. Wallach, 935 F.2d 445, 461 (2d Cir.1991); see also United States v. Paccione, 949 F.2d 1183, 1196 (2d Cir.1991) ("Use of the mails in furtherance of a scheme to offer services in exchange for a fee, with the intent not to perform those services, is within the reach of § 1341."), cert. denied, 505 U.S. 1220, 112 S.Ct. 3029, 120 L.Ed.2d 900 (1994). The evidence in this case showed that the municipalities contracted for disposal at the 106-mile site, that they paid a premium for that service, that General Marine in fact routinely dumped sludge in waters short of the 106-mile site, and that the appellants nonetheless participated in a fraudulent scheme to bill the municipalities by mail as if all of the waste disposal had occurred at the 106-mile site. Moreover, a representative of one of the municipalities testified that General Marine's short-dumping could have subjected the municipality to fines and to the loss of its environmental permit. This evidence suffices to establish that the appellants intended to harm the municipalities.

The appellants' reliance on United States v. Starr, 816 F.2d 94 (2d Cir.1987), is misplaced. The defendants in that case were operators of a bulk mailing service who cheated the Postal Service by concealing higher-rate packages in mail sacks that were supposed to contain only lower-rate packages. See id. at 96. Although the Postal Service was victimized by the scheme, the indictment charged the defendants only with defrauding their own customers. See id. at 97 n. 4. We reversed the defendants' mail fraud convictions, on the ground that the customers had received the same service they would have received had the defendants paid the proper postage. See id. at 99. By contrast, in this case the municipalities did not receive the service--sludge disposal at the 106-mile site--for which they had contracted and paid. Accordingly, Starr is of no help to the appellants here.

B. Jury Instruction on "Intent to Defraud"

The appellants next claim that the district court's instruction on "intent to defraud" was in error. The district court instructed the jury as follows:

Intent to defraud means to act knowingly and with the specific intention to deceive for the purpose of causing some financial loss to another or gain to oneself or to another person.

(emphasis added). The appellants argue that this instruction impermissibly allowed the jury to convict on the basis that the appellants intended to cause either loss to their customers or gain to themselves, even though only the former satisfies the mail fraud statute's element of fraudulent intent. In support of their argument, the appellants again rely on Starr. There, we found that, "[t]o the extent that [a virtually identical] charge permit[ted] the jury to find an intent to defraud based solely on the defendants' appropriation of a benefit to themselves, it [was] error." Starr, 816 F.2d at 101. We believe that the appellants' claim in the instant case is without merit.

In light of the appellants' conceded failure to object at trial, we review the district court's instruction for plain error, see Fed.R.Crim.P. 52(b) (plain error standard)--a standard that requires " '(1) error, (2) that is plain, and (3) that affect[s] substantial rights. If all three conditions are met, an appellate court may then exercise its discretion to notice a forfeited error, but only if (4) the error seriously affect[s] the fairness, integrity, or public reputation of judicial proceedings.' " United States v. Rossomando, 144 F.3d 197, 200 (2d Cir.1998) (quoting Johnson v. United States, 520 U.S. 461, ----, 117 S.Ct. 1544, 1549, 137 L.Ed.2d 718 (1997)). To determine if there was plain error, we will review an "erroneous instruction in light of other instructions and the evidence to determine what findings the jury made and whether such findings are the functional equivalent of required findings." United States v. Chandler, 98 F.3d 711, 715 (2d Cir.1996) (internal quotation marks omitted).

In Chandler, we reviewed for plain error an instruction in a bank fraud case under 18 U.S.C. § 1344, which we recognized to have been modeled on the mail and wire fraud statutes. See id. at 715. The defendant in Chandler had used false identification to obtain a line of credit from a bank and then made purchases using that line of credit. See id. at 713. The trial judge failed...