United States v. Steffen, PLAINTIFF-APPELLEE

Decision Date12 February 2001
Docket NumberNo. 99-10219,PLAINTIFF-APPELLEE,DEFENDANT-APPELLANT,99-10219
Citation251 F.3d 1273
Parties(9th. Cir. 2001) UNITED STATES OF AMERICA,, v. WARREN K. STEFFEN,
CourtU.S. Court of Appeals — Ninth Circuit

Michael K. Powell, Office of the Federal Public Defender, Reno, Nevada, for the defendant-appellant.

Brian L. Sullivan, Office of the United States Attorney, Reno, Nevada, for the plaintiff-appellee.

Appeal from the United States District Court for the District of Nevada Howard D. McKibben, District Judge, Presiding. D.C. No. CR-97-00094-HDM

Before: Procter Hug, Jr., John T. Noonan, and William A. Fletcher, Circuit Judges.

The opinion of the court was delivered by: W. Fletcher, Circuit Judge

OPINION

Warren K. Steffen was convicted after a jury trial of two counts of mail fraud, in violation of 18 U.S.C.§§ 1343, and one count of so-called "travel fraud," in violation of 18 U.S.C. §§ 2314. The district court sentenced him to sixty months for each of the first two counts, and seventy months for the third. The court ordered that these sentences run concurrently with each other, but consecutively to a sentence imposed previously for an unrelated crime.

Steffen presents two questions on appeal. First, he contends that there was insufficient evidence to convict him of "travel fraud" because he induced an agent of the fraud victim, rather than the victim himself, to travel across a state line. Second, he contends that the sentences in this case should run concurrently with, rather than consecutively to, the sentence for the unrelated crime.

We disagree with both of Steffen's contentions. We hold that 18 U.S.C. §§ 2314 includes within its scope travel by an agent of the ultimate target of the fraud, and we conclude that the district court did not err in imposing consecutive sentences. We therefore affirm the judgment of the district court.

I.

All activities leading to the charges in this case took place during 1992 and 1993, while Appellant Steffen was on probation for an earlier crime. In 1987, Steffen was convicted of three counts of wire fraud. He was released on probation in 1991, but that probation was revoked in 1993 because of the conduct at issue in this case. Steffen then escaped from prison while serving the remainder of his sentence for wire fraud. He was captured and convicted of the crime of escape, and was sentenced to twenty-four months in prison, to be served consecutively to the sentence he had been serving when he escaped. The sentence for the original wire fraud conviction ended in November 1998, and Appellant then started serving his sentence for escape. The sentence in this case was ordered to be served consecutively to the latter sentence.

In counts one and two, the wire fraud counts, Steffen solicited investments by stating that he would use the funds to invest in China. In count one, he solicited an investment from Frank and Jinx Rives, guaranteeing them a high rate of return and promising that he would return their investment within ninety days. Frank Rives authorized a wire transfer of $350,000 from Salt Lake City, Utah, to Steffen's bank in Nevada. The Riveses received neither a return of their principal nor the promised high rate of return.

In count two, Steffen promised Russell Barnings an"about risk free" investment through which Barnings could earn a twenty-percent return in sixty to ninety days. Barnings authorized a wire transfer of $148,000 from Salt Lake City, Utah, to Steffen's bank in Nevada. Like the Riveses, Barnings received neither the return of his capital nor the promised rate of return.

In count three, the travel fraud count, Steffen told Henry Braly, who lived in Colorado, that he needed $100,000 to complete a $1.5 million franchise deal. Steffen promised to return the $100,000, along with a $25,000 profit, to Braly within three hours of receiving the $100,000. Braly sent his business associate, Jerry Reiter, with a certified check for $100,000, from Colorado to meet Steffen in Nevada and to investigate the investment on his behalf. Steffen convinced Reiter, acting on behalf of Braly, to sign the certified check over to him. Steffen never returned the $100,000 and never delivered the promised profit. Steffen was sentenced to sixty months in prison for each of counts one and two, and to seventy months for count three. All three sentences were ordered to be served concurrently. The sentences from this case, however, were ordered to be served consecutively to the sentence for the crime of escape.

II.

Steffen contends that the district court misconstrued the "travel fraud" statute. We review de novo a district court's determination of a question of law. Gilmore v. California, 220 F.3d 987, 997 (9th Cir. 2000). As part of this first contention, Steffen argues that there was insufficient evidence to convict him of travel fraud. In reviewing the sufficiency of the evidence, we must determine "whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Jackson v. Virginia, 443 U.S. 307, 319 (1979).

Steffen next contends that he should have been sentenced concurrently, but this contention was not raised in the district court. We therefore review that contention for "plain error." United States v. Scrivner, 114 F.3d 964, 966 (9th Cir. 1997). Steffen must show that "(1) there was `error'; (2) it was `plain'; and (3) that the error affected `substantial rights.' If these conditions are met, [this court] may exercise [its] discretion to notice the forfeited error only if the error (4) `seriously affect[ed] the fairness, integrity, or public reputation of judicial proceedings.' " United States v. Nordby, 225 F.3d 1053, 1060 (9th Cir. 2000) (internal citations omitted) (quoting United States v. Olano, 507 U.S. 725, 732 (1993)).

III.

Steffen contends that he cannot be convicted of "travel fraud" because the person ultimately defrauded was not the person who traveled interstate with the funds. Section 2314, under which Steffen was convicted, criminalizes the inducing of "any person or persons to travel in . . . interstate commerce . . . in the execution . . . of a scheme . . . to defraud that person or those persons of money . . . " (emphasis added).1 In this case, Steffen argues that the person or persons who traveled must be the person or persons who were the ultimate target or targets of the fraud. Steffen concedes that the government proved that he devised a scheme to defraud Braly, but he argues that, because it was Reiter rather than Braly who traveled in interstate commerce, the government failed to prove all elements of the crime.

We do not read the statute so narrowly. We believe a permissible plain-language reading of the statute is that a person who is induced to travel across a state line with money, and who is fraudulently induced to deliver that money, has been defrauded within the meaning of §§ 2314, even if the money does not belong to that person. We hold that as long as the person is traveling as the agent of the person who is the ultimate target of the fraud, the traveling agent is a person who has been defrauded within the meaning of the statute.

We are reinforced in our approach to §§ 2314 by the Seventh Circuit, which has similarly declined to read the statute narrowly. In United States v. O'Connor, 874 F.2d 483, 488 (7th Cir. 1989), a defrauded corporation, TME, sent its agent, Barter, across state lines with the money. The Seventh Circuit stated,

Corporations act through their agents. Barter was TME's agent. When Barter traveled to Milwaukee, he did so on TME's behalf. As we have seen, TME was a victim of O'Connor's fraudulent scheme. Therefore, a "victim" of O'Connor's scheme (TME acting through Barter) was induced to travel in interstate commerce . . . .

Id. According to the Seventh Circuit,

Section 2314 was designed to discourage the taking and receiving of stolen goods . . . . "The ultimate beneficiary of the law, of course, is the property owner who thereby enjoys greater governmental protection of property rights." . . . We see no reason why Congress would not have wanted to discourage the stealing of corporate property any less than it wanted to discourage the stealing of a natural person's property.

Id. (internal citations omitted). Like the Seventh Circuit, we see no reason why Congress would have wanted to discourage the stealing of individual property through an agent any less than it would have wanted to discourage the stealing of corporate property through an agent.

It is well established that §§ 2314 was passed to fill a gap in the mail fraud statute. See United States v. Benson, 548 F.2d 42, 46 n.6 (2d Cir. 1977). Congress's intent in passing §§ 2314 was to prevent criminals engaged in fraud from evading prosecution merely by using a different means of transporting money. Reading the statute narrowly so as not to encompass fraud of the sort charged in count three would allow scam artists to avoid prosecution under both the mail fraud statute and the travel fraud statute, although the fraud perpetrated is indistinguishable in purpose and effect from other types of mail and travel fraud. Here, it is only the desire of the ultimate target to spend his agent's time instead of his own that would allow the perpetrator of the fraud to evade prosecution if we failed to read §§ 2314 to include the conduct in this case.

IV.

Steffen next argues that he was erroneously given consecutive rather than concurrent sentences. Steffen contends first that the district court relied on the 1993 rather than the 1998 version of the Sentencing Guidelines in imposing consecutive sentences, and second that the district court did not satisfy the requirements of 18 U.S.C. §§§§ 3553(a) and 3584(b) because it did not sufficiently justify on...

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