U.S. v. Stapleton

• Decision Date: 18 June 2002
• Docket Number: No. 00-50647.,00-50647.
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Stephen James STAPLETON, aka Bob Johnson, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

293 F.3d 1111

UNITED STATES of America, Plaintiff-Appellee, v. Stephen James STAPLETON, aka Bob Johnson, Defendant-Appellant.

No. 00-50647.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 6, 2002.

Filed June 18, 2002.

COPYRIGHT MATERIAL OMITTED

William G. Morrissey, Santa Ana, California, for the defendant-appellant.

Ellyn Marcus Lindsay, Assistant United States Attorney, Major Frauds Section, Los Angeles, California, for the plaintiff-appellee.

Appeal from the United States District Court for the Central District of California; Gary L. Taylor, District Judge, Presiding. D.C. No. CR-99-00047-GLT-03.

Before: KLEINFELD and GRABER, Circuit Judges, and COLLINS,^* District Judge.

GRABER, Circuit Judge.

A jury convicted Defendant Stephen James Stapleton of several counts of mail fraud, 18 U.S.C. § 1341, and several counts of wire fraud, 18 U.S.C. § 1343. On appeal, he challenges an instruction that permitted the jury to find him vicariously liable for acts of other participants in the fraudulent scheme of which he was a part. We affirm.

I. THE FRAUDULENT SCHEME

Criminal charges against several people, including Defendant, arose from their involvement in a telephone-marketing company called Gecko Holdings, Inc. (Gecko), which operated from December 1997 to March 1999. Defendant was a telephone salesperson there from October 1998 until March 1999.¹

Gecko was a fraudulent organization that purported to be initiating a public stock offering for an Internet casino. It operated out of two offices in Orange County, California, under the direction of Robert Syrax.²

Gecko's participating telemarketers called potential investors and made false statements to induce them to send money to Gecko. The false statements included representations that Gecko's managers were affiliated with Cryptologic, an Internet casino that had been taken public successfully; that Gecko was operating a casino on the island of St. Kitts in the Caribbean; that only a limited number of Gecko shares would be available; that there was little risk associated with the investment; that investors could expect huge returns quickly; and that Gecko was very close to going public on the NASDAQ exchange. None of the foregoing representations was accurate.

In addition, Gecko sent three different versions of its prospectus to its victims. Each version contained a different list of officers. The named individuals either were not officers (for example, one was an acquaintance from a health club who was not associated with Gecko and who had not given permission to use his name) or were entirely fictitious. The "lead sheets" containing the names and telephone numbers of potential investors were color-coded so that the telemarketers knew which version of the prospectus a particular person had received and, thus, which fictitious corporate officers could be discussed in the conversation. Gecko also sent letters to investors, allegedly signed by fictitious officers, which discussed the go-public price of the stock.

II. PROCEDURAL BACKGROUND

Defendant and six others were charged with several counts of mail fraud and several counts of wire fraud. Three of those charged pleaded guilty. The remaining four, including Defendant, were tried jointly. The district court granted Defendant's motion for a judgment of acquittal on one charge; the jury found him guilty on the rest.

A co-defendant filed a motion for a new trial, in which Defendant joined. The court denied the motion and, thereafter, sentenced Defendant to 46 months of imprisonment, to be followed by three years of supervised release, plus restitution of $4,147,961.25 and a special assessment of $1,700. Defendant filed this timely appeal.

III. THE "CO SCHEMER" INSTRUCTION

Defendant's only argument on appeal is that the district court erred in instructing the jury on a theory of "co-schemer" liability. He asserts that the instruction unlawfully broadened the indictment and omitted essential elements of the offense.

A. Standards of Review

We review de novo whether the district court's instructions omitted or misstated an element of the charged offense. United States v. Knapp, 120 F.3d 928, 930 (9th Cir.1997). We review for abuse of discretion the formulation of the instructions. Id. We must consider the instructions as a whole, and in context. United States v. Warren, 25 F.3d 890, 898 (9th Cir.1994).

B. The Instructions

After providing general instructions, including instructions about the presumption of innocence and the requirement of proof beyond a reasonable doubt, the court gave the following instructions concerning the elements of mail fraud, the elements of wire fraud, and the ways in which a defendant may be held personally responsible for the commission of an act of mail fraud or wire fraud:

In order for the defendants to be found guilty of mail fraud, the government must prove each of the following elements beyond a reasonable doubt.

First, the defendant made up or participated in a scheme or a plan for obtaining money or property by making false promises or statements, with all of you agreeing on at least one particular false promise or statement that was made.

Second, the defendant knew that the promises or statements were false.

Third, the promises or statements were of a kind that would reasonably influence a person to part with money or property.

Fourth, the defendant acted with the intent to defraud.

And, fifth, the defendant used or caused to be used the mails to carry out or attempt to carry out an essential part of the scheme.

....

In order for the defendant to be found guilty of wire fraud, the government must prove each of the following elements beyond a reasonable doubt.

First, the defendant made up or participated in a scheme or plan for obtaining money or property by making false promises or statements with all of you agreeing on at least one particular false promise or statement that was made.

Second element is that the defendant knew that the promises or statements were false.

The third element is that the promises or statements were of a kind that would reasonably influence a person to part with money or property.

The fourth element is that the defendant acted with the intent to defraud.

And the fifth element is that the defendant used or caused to be used wire or radio or television communication in interstate or foreign commerce to carry out or attempt to carry out an essential part of the scheme.

....

The phrases "scheme to defraud" and "scheme to obtain money or funds" mean[ ] any deliberate plan of action or course of conduct by which someone intends to deceive or to cheat another or by which someone intends to deprive another of something of value.

....

An intent to defraud is an intent to deceive or cheat. The intent of a person or the knowledge that a person possesses at any given time may not ordinarily be proved directly because there is no way of directly scrutinizing or examining the workings of the human mind.

So in determining the issue of what a person knew or what a person intended at a particular time, you may consider any statements made or acts done by that person and all other facts and circumstances received in evidence which may aid in your determination of that person's knowledge or intent.

You may infer, but you're certainly not required to infer, that a person intends the natural and probable consequences of acts that are knowingly done or knowingly omitted....

An act is done knowingly if the defendant is aware of the act and does not act or fail to act through ignorance or mistake or accident. You may consider evidence of the defendant's words, acts, or omissions along with all other evidence in deciding whether a defendant acted knowingly.

It's not necessary for the government [to] prove that the defendant personally did every act constituting the offense that's charged. As a general rule, whatever any person is legally capable of doing himself, he can do through another as his agent.

So if the acts or the conduct of another is deliberately ordered or directed by the defendant or deliberately authorized or consented to by the defendant, then the law holds the defendant responsible for such acts or conduct just the same as if personally done by the defendant.

You may hear discussion of two additional legal theories today so let me instruct you about what those theories are.

The first one is the theory of a coschemer's potential liability. Each member of a scheme to defraud is responsible for the actions of other coschemers performed during the course of and in furtherance of the scheme.

Before you may consider the statements or the acts of a coschemer, you must first determine whether the acts or statements were made during the exercise of and in furtherance of the unlawful scheme.

Once you have decided that a defendant was a member of a scheme to defraud and had the intent to defraud, that defendant is responsible for what the other coschemers said or did to carry out the scheme even if the defendant did not know what they said or did.

For a defendant to be found guilty of an offense allegedly committed by a coschemer as part of the scheme, the offense must be one which would reasonably have been foreseen to be a necessary and natural consequence of the scheme to defraud.

Let me also tell you about the concept of aiding and abetting....

A defendant may be found guilty of a crime even if the defendant personally did not commit the act or acts constituting the crime but aided and abetted in its commission.

(Boldface highlighting added.)

The court then completed the instructions concerning aiding and abetting and concluded with some general instructions. Defendant challenges only the above-highlighted portion of the instructions.

During deliberations, the jury sent this note to the judge: "The jury requests the following: Jurors question[ ] whether one can be a co-schemer with one he has no ...