486 F.3d 1212 (11th Cir. 2007), 05-11622, United States v. Ward
|Citation:||486 F.3d 1212|
|Party Name:||UNITED STATES of America, Plaintiff-Appellee, v. Artemus E. WARD, Jr., Defendant-Appellant.|
|Case Date:||May 16, 2007|
|Court:||United States Courts of Appeals, Court of Appeals for the Eleventh Circuit|
[Copyrighted Material Omitted]
Craig L. Crawford and Rosemary T. Cakmis, Fed. Pub. Defenders, Orlando, FL, Martin Der Ovanesian, Fed. Pub. Def., Fort Myers, FL, for Ward.
Douglas Molloy, Fort Myers, FL, Peter J. Sholl, Asst. U.S. Atty., Tampa, FL, for U.S.
Appeal from the United States District Court for the Middle District of Florida, D. C. Docket No. 03-00039-CR-FTM-29-DNF.
Before ANDERSON and MARCUS, Circuit Judges, and ALTONAGA, [*] District Judge.
MARCUS, Circuit Judge:
Artemus E. Ward, Jr. ("Ward") appeals his conviction after jury trial and his ensuing sixty-month prison sentence for mail and wire fraud. The charges arose out of Ward's involvement in a complex, fraudulent Ponzi scheme, 1 whereby millions of dollars in investor funds were obtained by making false representations that the investments would be used to make loans to used car dealers, that the investors would be paid high rates of interest, and that the loans would be fully insured by liens on the dealers' inventories of used cars. Ward claims on appeal that his conviction should be reversed and his sentence vacated, first, because the evidence did not sufficiently establish that he actually caused the mailings and wire transfers charged in the substantive counts of the indictment, and, second, because the district court "constructively amended" the indictment by instructing the jury that it could convict on the substantive offenses even if it could not reach a verdict on the conspiracy charge. Finally, Ward challenges his sentence as violating the Ex Post Facto Clause of the Constitution. After thorough review, we affirm.
In March 2004, a grand jury charged Artemus Ward, Jr., and his partner, Jeffrey Pipher ("Pipher"), in a second superseding indictment with conspiracy, mail fraud, and wire fraud. Specifically, Ward and Pipher were charged in Count One with conspiracy to commit mail and wire fraud in violation of 18 U.S.C. § 371 for soliciting investor funds through fraudulent representations about how these funds would be used to finance loans to automotive dealerships. Count Two charged Ward and Pipher with mail fraud in violation of 18 U.S.C. §§ 1341 and 2 for obtaining investor funds under false pretenses by mailing or causing to be mailed a collateralized promissory note in September 2000 to an investor named Richard Rabenstein.
Count Three charged Ward and Pipher with wire fraud in violation of 18 U.S.C. §§ 1343 and 2 for obtaining investor funds under false pretenses when investors Ellen and Randy Johns wired funds from their bank account to Ward and Pipher on April 24, 2000. Finally, Count Four charged Ward with a second mail fraud count in violation of 18 U.S.C. §§ 1341 and 2 for obtaining investor funds under false pretenses by mailing investment documents to an investor named Larry Baldwin on January 7, 2002.
Before trial, Pipher pled guilty to Counts One, Two, and Three pursuant to a written plea agreement and became a witness for the government, leaving Ward to stand trial alone. After a week-long trial, the jury was not able to reach a verdict as to the conspiracy charge, 2 but found Ward guilty of both mail fraud counts and the wire fraud charge too.
Viewing the evidence in the light most favorable to the jury verdict, the essential facts adduced at trial are these. In 1999, Pipher and the defendant Ward incorporated the Collateral Equities Corporation ("CEC") in Nevada and designated themselves as president and general manager, respectively. CEC's ostensible business objective was to solicit potential investors to invest in collateralized corporate notes, or promissory notes. The investors were told that their principal would be invested in the "auto floor planning business," which involved lending car dealerships the funds to purchase inventory. The titles to the cars were held as collateral, and as each car was sold, the dealer was required to repay a portion of the loan. Eventually, the lender would return the title to the dealer. Through advertisements placed in the Investor's Business Daily paper, the USA Today newspaper, and a few local California papers, and through a telemarketing "boiler room" operation named One Trade, Ward and Pipher enticed many investors to part with their money.
Ward and Pipher promised would-be investors annual returns of between 28% and 50% with maturity dates varying from 6 to 24 months. In theory, this business proposition offered investors a spectacular deal -- a high rate of return on investments with a low risk that the investments would go awry because the loans were fully secured by collateral. From its inception, however, this business scheme was fraught with deception.
In establishing the initial information packets, promissory notes, and investor contracts for CEC, Pipher took various documents without permission from his job with another automobile floor planning operation, Secured Assets Incorporated ("SAI"), and with Ward's assistance, copied these documents to create CEC's basic documents. Moreover, the introductory letter to the information packet, which both Ward and Pipher signed, falsely represented that CEC had been in business for some three-and-a-half years when, in reality, the company had just been formed.
Overall, some ninety to one hundred investors, contributing approximately $5 million in total to Ward and Pipher, were victimized by the fraudulent scheme. At the time of trial, about $3.2 million in investor funds remained unaccounted for and only about $90,000 had actually been loaned to any car dealership. Although Pipher and Ward gave investors a list of seventeen car dealerships with which they claimed they were doing business, Ward and Pipher actually conducted business
with only two dealerships and one self-employed car wholesaler. Some of the CEC documents also falsely claimed that CEC was holding title to cars valued at $900,000. Ward also used some of the money to gamble, and Pipher used some of it to make other personal investments. In fact, most of the investors' money was spent by Pipher and Ward for their personal use and to make interest payments, albeit only to the initial investors. At trial, Ward testified that "in all but a handful of instances, I was the one who had talked the people into joining the company in the first place and knew where the money went, whether it was to [Pipher's] account or my account or the account in Monterey."
Because Ward claims that the evidence was insufficient as to each of the substantive mail and wire fraud counts, we group the evidence for convenience by count.
A. Count Two: Mail Fraud Against Richard Rabenstein
Count Two, the first mail fraud count, charged in the operative paragraph that:
In or about September, 2000, in the Middle District of Florida and elsewhere, the defendants, Artemus E. Ward, Jr., and Jeffrey Pipher, for the purpose of executing the aforementioned conspiracy to defraud, and for obtaining money and property by means of false pretenses, representations and promises, did knowingly mail and cause to be mailed a matter to be delivered by the United States Postal Service, a collateralized CEC promissory note to Richard Rabenstein, who had invested approximately $155,000 with the defendants. All in violation of Title 18, United States Code, Sections 1341 and 2.
The central document alleged in Count Two of the indictment -- a promissory note mailed to victim Richard Rabenstein and dated September 1, 2000 -- was signed only by Pipher and not Ward. See Gov. Ex. 4. The note said that CEC "promise[d] to pay . . . monthly interest payments on the principal sum of One Hundred Fifty Five Thousand Dollars ($155,000) at the rate of three and one half percent (3.5%) per month, which calculates to a rate of Forty two percent (42%), per annum." Id. At trial, the government produced ample evidence establishing that, although Ward was not responsible for actually mailing the promissory note listed in Count Two, he was substantially involved in a variety of other mailings and transactions with Richard Rabenstein, all designed to further the fraudulent scheme.
Richard Rabenstein's ill-fated business venture with CEC and Ward began when he responded in June 1999 to CEC's classified advertisement posted in the Investor's Business Daily. He called the number listed in the ad and spoke with Pipher, who soon thereafter mailed him a brochure signed by both Ward and Pipher. See Gov. Ex. 2. The introductory letter to the brochure, dated July 15, 1999, falsely represented that, "For the past three and half years we have been involved in a very lucrative business in a burgeoning industry." Id. The letter promised "the very high return of 42% on your loan dollars with a minimum $10,000 investment." Id. Indeed, the CEC Executive Summary, attached to the introductory letter, falsely said that "[c]urrently CEC is servicing twelve dealers in greater San Diego and an additional two in the Los Angeles area -- the limit of our current capitalization of approximately $400k." Id. The back page of the packet, marked "Company Confidential," falsely listed seventeen car dealerships in San Diego County, ten of which had a dollar amount in the column titled "Note Bal[ance]." Id. To assuage any doubts about CEC's legitimacy, Rabenstein
was also provided with three references of ostensibly satisfied investors.
Additionally, on July 27, 1999, Ward sent Rabenstein a handwritten letter of invitation, bearing Ward's signature, to make an initial investment...
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