U.S. v. Themy
| Decision Date | 27 June 1980 |
| Docket Number | No. 79-1186,79-1186 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Tim THEMY, a/k/a Themostakis Kotronakis, a/k/a Dean Constantinos, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Steven W. Snarr, Asst. U. S. Atty., Salt Lake City, Utah (Ronald L. Rencher, U. S. Atty., Salt Lake City, Utah, with him on the brief), for plaintiff-appellee.
Brent D. Ward, Salt Lake City, Utah (John Preston Creer, Salt Lake City, Utah, with him on the brief), of Senior & Senior, Salt Lake City, Utah, for defendant-appellant.
Before BARRETT and DOYLE, Circuit Judges, and MILLER *, Judge.
Tim Themy appeals from his conviction upon jury verdicts of guilty to thirteen counts of mail fraud in violation of 18 U.S.C. § 1341.
The indictment charged that Themy devised a scheme and artifice to defraud and to obtain money from his victims by means of false representations relating to the quality and value of emeralds which Themy would provide; and that as a part of said scheme and artifice, Themy placed advertisements in several magazines distributed nationwide. Among the specific false representations alleged were that the emeralds were "good quality" stones "worth a minimum of $500 per carat". The indictment charged that Themy, in furtherance of the scheme and artifice to defraud, caused letters from several named victims to be delivered by mail to Themy's place of business.
18 U.S.C. § 1341 defines the crime of mail fraud as follows:
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises . . . for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be (punished).
Mail fraud is established by proof that the defendant schemed to obtain money by false representations, and that the mails were used in furtherance of the scheme. 18 U.S.C. § 1341; United States v. Seasholtz, 435 F.2d 4, 8 (10th Cir. 1970); Beck v. United States, 305 F.2d 595, 598 (10th Cir. 1962), cert. denied, 371 U.S. 890, 83 S.Ct. 186, 9 L.Ed.2d 123 (1962), cert. denied sub nom. Tuthill v. United States, 371 U.S. 895, 83 S.Ct. 195, 9 L.Ed.2d 128 (1962).
With respect to the first element of the offense, the scheme, this Court has held that "(o)ne cannot be held to guilty knowledge of falsity of his statements simply because a reasonable man under the same or similar circumstances would have known of the falsity of such statements." Elbel v. United States, 364 F.2d 127, 134 (10th Cir. 1966), cert. denied, 385 U.S. 1014, 87 S.Ct. 726, 17 L.Ed.2d 550 (1967). However, indifference to the truth of statements made to induce others to action amounts to fraudulent intent. United States v. Mackay, 491 F.2d 616, 623 (10th Cir. 1973), cert. denied, 416 U.S. 972, 94 S.Ct. 1996, 40 L.Ed.2d 560 (1974), cert. denied, 419 U.S. 1047, 95 S.Ct. 619, 42 L.Ed.2d 640 (1974); Elbel v. United States, supra, at 134; Gusow v. United States, 347 F.2d 755, 756 (10th Cir. 1965), cert. denied, 382 U.S. 906, 86 S.Ct. 243, 15 L.Ed.2d 159 (1965). And even though a defendant may firmly believe in his plan, his belief will not justify baseless or reckless representations. Sparrow v. United States, 402 F.2d 826, 828 (10th Cir. 1968).
Direct proof of the fraudulent intent is not necessary. United States v. Curtis, 537 F.2d 1091, 1097 (10th Cir. 1976), cert. denied, 429 U.S. 962, 97 S.Ct. 389, 50 L.Ed.2d 330 (1976); Gusow v. United States, supra, at 756.
As has been said many times, fraudulent intent is in many instances not susceptible of proof by direct evidence. In numerous cases it must be inferred from a series of acts and pertinent circumstances. One will not be heard to say that he did not intend the natural consequences of his conduct.
Crosby v. United States, 183 F.2d 373, 375 (10th Cir. 1950), cert. denied, 340 U.S. 906, 71 S.Ct. 274, 95 L.Ed. 656 (1950).
Whether a mail fraud defendant had the requisite criminal intent is, of course, a question for the jury. United States v. Wolf, 561 F.2d 1376, 1379 (10th Cir. 1977); United States v. Seasholtz, supra, at 8; Beckwith v. United States, 367 F.2d 458, 461 (10th Cir. 1966).
With these well-known principles in mind, we turn now to Themy's contentions.
Themy contends:
I. The verdicts are not supported by the evidence, in that a) no evidence was presented that Themy represented the emeralds to be good quality stones worth $500 per carat, b) there was insufficient evidence of Themy's criminal or fraudulent intent, and c) the prosecution did not show that Themy's emerald marketing plan, considered as a whole and as it worked in practice, was fraudulent, but instead mischaracterized isolated instances of false advertising as a scheme to defraud; and
II. The District Court erred in refusing to give Themy's proposed instruction on good faith and "puffing" in full.
Themy contends the evidence does not support the verdicts, in that neither the false representations nor the scheme to defraud were proved.
As an appellate court reviewing a criminal conviction, we must view the evidence in the light most favorable to the prosecution. United States v. Petersen, 611 F.2d 1313, 1317 (10th Cir. 1979); United States v. Curtis, supra, at 1096; United States v. Mackay, supra, at 619. If substantial evidence supports the verdicts, they cannot be set aside. United States v. Parnell, 581 F.2d 1374, 1381 (10th Cir. 1978), cert. denied sub nom. Cox v. United States, 439 U.S. 1076, 99 S.Ct. 852, 59 L.Ed.2d 44 (1979); Gusow v. United States, supra, at 759. The jury observed the prosecution and defense witnesses, appraised their credibility determined the weight to be given to their testimony, drew permissible inferences therefrom, resolved conflicts in the evidence and reached ultimate conclusions of fact. Those are functions exclusively reserved to the jury as the trier of fact. United States v. Waldron, 568 F.2d 185, 187 (10th Cir. 1977), cert. denied, 434 U.S. 1080, 98 S.Ct. 1276, 55 L.Ed.2d 788 (1978); United States v. Nolan, 551 F.2d 266, 274 (10th Cir. 1977), cert. denied, 434 U.S. 904, 98 S.Ct. 302, 54 L.Ed.2d 191 (1977).
At trial, the prosecution depicted a shady venture in which low-grade emeralds would be sold to the public at highly inflated prices. The first step of Themy's plan, as thus presented, was to recruit a squad of salesmen through false magazine advertising and promotional literature. Each of the salesmen, having paid $100 or more for the right to participate in the venture, was to pose as a financially distressed private seller of prized gems. The plan was that the emeralds would "sell themselves" to unknowledgeable buyers eager to take advantage of a bargain.
Thirteen of Themy's victims and would-be salesmen testified for the prosecution. In twelve of the thirteen counts the victims responded by mail to one of several advertisements which Themy ran in nationally circulated magazines. The advertisements were important prosecution evidence. Each of the advertisements contained statements such as these:
Mining of quality emeralds is diminishing hence their prices tripled during 1976. . . . With this plan, people knock on your door, you don't knock on theirs! . . . . You don't ask them to buy they buy on their own due to high quality and price . . . My prices start from $100 per carat! Amazing!! Especially when you compare my prices with those of the Jewelry trade where the November price index shows emeralds from $500 a carat upwards.
People who see your ad or receive your letter on emeralds will start calling your home phone number wanting to come see and buy your emeralds. They'll buy them because the quality and price is unbeatable. . . . My emeralds are genuine, cut to near perfection. . . . Most amazing of all, however, are the prices. They start from $100 per carat. The majority of my emeralds are priced near the $100-per-carat figure! My emeralds at these prices don't need salesmen, they need public exposure. This is what my marketing plan is aiming at public exposure. For your information, the precious gems industry's September-1976 price index shows emeralds priced from $500 to $12,000 per carat! Compare that with mine at $100 per carat! Can you see the future? What a mark-up, what a field for you to conquer. Once you join my plan, I'll be sending you every month the same price indexes, so that you can show to your customers.
They buy them because the price and quality is unbeatable! . . . . My prices start from $100 per carat! Compare with the industry's September 1976 price index where they start from $500 to $12,000 per carat! Can you see the future? I'll send you copy of the price index, every month as it comes out.
In the remaining count, the victim studied Themy's promotional booklet describing the sales program in detail; thereafter, the victim mailed a letter to Themy asking to participate in his venture. The booklet contained this language:
Talking about prices, take a look at the last page in this booklet. The industry's prices compared to mine is self-explanatory ...... do you begin to see the future?
(Last Page)
Current prices...
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