U.S. v. Luttrell
| Decision Date | 06 November 1989 |
| Docket Number | Nos. 87-5303,87-5310,s. 87-5303 |
| Citation | 889 F.2d 806 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Laurie Jane LUTTRELL, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. William Dale KEGLEY, aka: Bill Kegley, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Donald B. Marks, Beverly Hills, Cal., for defendant-appellant, luttrell.
Anthony P. Brooklier, Beverly Hills, Cal., for defendant-appellant, Kegley.
Maurice A. Leiter, Asst. U.S. Atty., Los Angeles, Cal., for plaintiff-appellee.
Appeal from the United States District Court for the Central District of California.
Before NELSON, REINHARDT and O'SCANNLAIN, Circuit Judges.
William Dale Kegley and Laurie Jane Luttrell ("appellants") appeal their convictions of conspiracy to possess and traffic in unauthorized and counterfeit credit card drafts, 18 U.S.C. Sec. 1029(a)(1)-(3) (1982) and attempt to traffic in counterfeit drafts, 18 U.S.C. Sec. 1029(a)(1) and (b)(1) (1982). 1 The court below determined that appellants conspired to process counterfeit and unauthorized credit card drafts and committed overt acts in furtherance of the crime. They challenge the sufficiency of the evidence supporting their convictions. Appellants also appeal the denial of their motion for acquittal based on outrageous government conduct. Appellants raise the following issues: (1) whether the government proved that an overt act was committed in furtherance of the conspiracy; (2) whether the evidence was sufficient to find that appellants had the intent to process counterfeit and unauthorized credit card drafts; (3) whether the credit card drafts involved in this case were unauthorized access devices pursuant to 18 U.S.C. Sec. 1029(e)(3) 2; and (4) whether the government's conduct was so outrageous that acquittal is warranted. We affirm in part, and remand in part.
Appellants were indicted by a federal grand jury and were convicted of counts one and three. The government dismissed count two prior to trial. Count I charged appellants with conspiracy to possess and traffic in unauthorized and counterfeit credit card drafts, in violation of 18 U.S.C. Sec. 1029(a)(1)-(3). Count III charged appellants with attempt to traffic in counterfeit drafts, in violation of 18 U.S.C. Sec. 1029(a)(1) and (b)(1).
In 1980 appellant Kegley was operating a business, Complimentary Vacation Club, which offered vacation packages at discount prices via telemarketing. Kegley opened an account with Bank of America where he could deposit the credit card drafts that had been authorized by the customers who had purchased the packages. The bank later canceled the account and returned the drafts. Kegley returned the money that the bank had advanced on the drafts. Because his customers had taken the vacations prior to the bank's action, Kegley suffered a loss of hundreds of thousands of dollars. Kegley kept the returned drafts in his possession for seven years. No criminal or civil actions were brought against Kegley in conjunction with these events.
Richard Barker, a hired government informant and former acquaintance of Kegley's, was instructed by the government to solicit prospective clients for illegal credit card draft deals. Barker was awaiting sentencing for a credit card fraud conviction. The Secret Service set up a fictitious business, Aloha Imports, to investigate telemarketing illegalities. Barker contacted Kegley and informed him that he could help him factor credit card drafts. 3 Andrew Yee was an undercover agent operating Aloha Imports under the name David Young.
On March 12, 1987 Young called Kegley to discuss the possibility of processing credit card drafts. During the phone conversation, Kegley indicated that he had quite a few drafts that were a "little bit old" and some were invalid. Young said that he could process the drafts and that the split of 60/40 between Young and Kegley was negotiable. Young suggested meeting the next day at noon to discuss details and to negotiate Kegley's percentage of the drafts. Young gave Kegley directions to Aloha Imports in Culver City.
On March 13, 1987, Kegley and Luttrell met with Young. Prior to the meeting, the Secret Service had no knowledge of Luttrell. Kegley introduced her as his business associate and she took notes during the meeting. The meeting was recorded and videotaped. Young explained to Kegley how the credit card factoring scheme would work. Young initiated the conversation about factoring the credit card drafts. He represented that he had a company in Honolulu and that he had many contacts in Southeast Asia where he could deposit the drafts.
Young first mentioned that the merchant imprint appearing on the drafts should be changed. Kegley agreed that his name would be removed from the drafts. Kegley did not object to Young's stated desire to change the amounts on the drafts in order that Young could receive a more substantial return. Young informed Kegley that the drafts would have to be deposited into a merchant's account and that the money would be wired to Young's account within 24 hours thereafter. Young announced his plan to fly to Honolulu and then to Singapore on Monday March 16, 1987. Kegley was hesitant and acknowledged the illegality of the scheme. After much hesitation, they agreed that Luttrell would collect the money from the transaction on March 19, 1987 because Kegley was scheduled to be out of town. At the end of the meeting, appellants gave Young nearly $1 million in credit card drafts.
Three days after the transfer, on the morning that Young was to fly to Singapore to factor the drafts, Kegley called Aloha Imports in Honolulu. Agent William Pickering took the call. Kegley asked questions about Young and Aloha Imports. Kegley told Pickering that he wanted to cancel the transaction. He immediately sent a Mailgram stating his desire to cancel the transaction. Young called Kegley after receiving a message from Pickering that Kegley wanted to cancel the deal; Young pretended to be calling from Singapore even though according to the plan he should not have yet left Honolulu.
Kegley definitively stated to Young that he did not want anything to do with the operation and that Young should keep Kegley's share of the profits. Young told him that it was too late, the drafts had already gone through the process and Kegley's share was $800,000. Kegley told Young to keep all of the money. The government then brought charges against Kegley and Luttrell. The trial court instructed the jury about the defense of entrapment. The jury rejected the entrapment defense and convicted Kegley and Luttrell of conspiracy to possess unauthorized credit card drafts and attempt to traffic in counterfeit drafts. The court sentenced Kegley and Luttrell to terms of probation without any period of custody as a condition thereof.
On a challenge to the sufficiency of the evidence, the standard of review is whether there is substantial evidence to support the conviction. United States v. Nolan, 700 F.2d 479, 485 (9th Cir.), cert. denied, 462 U.S. 1123, 103 S.Ct. 3095, 77 L.Ed.2d 1354 (1983). The court must view the evidence in the light most favorable to the government. If any rational jury could find the essential elements of the crime beyond a reasonable doubt, the conviction must be affirmed. United States v. Dadanian, 818 F.2d 1443, 1446 (9th Cir.1987), modified, 856 F.2d 1391 (1988). The district court's refusal to dismiss the indictment on the basis of outrageous government conduct is reviewed de novo. United States v. Williams, 791 F.2d 1383 (9th Cir.), cert. denied sub nom. Sears v. United States, 479 U.S. 869, 107 S.Ct. 233, 93 L.Ed.2d 159 (1986).
The evidence was sufficient to support a conspiracy conviction. Appellants Luttrell and Kegley argue that the government failed to prove that an overt act was committed in furtherance of the conspiracy. This circuit has held that the crime of conspiracy is established by an agreement to engage in criminal activity, one or more overt acts taken to implement the agreement, and the requisite intent to commit the substantive crime. United States v. Indelicato, 800 F.2d 1482, 1483 (9th Cir.1986). The Ninth Circuit has specifically required the overt "acts to corroborate unequivocally the criminal intent in a conspiracy". United States v. Everett, 692 F.2d 596, 600 (9th Cir.1982), cert. denied, 460 U.S. 1051, 103 S.Ct. 1498, 75 L.Ed.2d 930 (1983).
The indictment in this case charged six overt acts. 4 Only one of these acts must be proven by the government to show conspiracy. Indelicato, 800 F.2d at 1483. The transaction on March 13, 1987 in which Kegley and Luttrell gave the undercover agent approximately one million dollars in credit card drafts was an overt act separate from the agreement which corroborates the criminal intent to fraudulently convert credit card drafts. Appellants do not contest the occurrence of this event. However, they do claim that the acts were not an attempt to effectuate the agreement. Even if the other five alleged overt acts are not separate from the agreement itself, the requirements for proving conspiracy have been made out by the government because the transfer of the drafts is clearly a separate overt act.
Appellants claim that their attempts to stop the processing of the drafts are evidence that they did not engage in overt acts. Kegley sent a telex to an undercover agent in Honolulu three days after appellants turned over the drafts. However, in order to avoid complicity in a conspiracy, one must withdraw before any overt act is taken in furtherance of the agreement. United States v. Sarault, 840 F.2d 1479, 1487 (9th Cir.1988). The telex was sent three days after the meeting and transfer of the drafts. This attempt to cancel the transaction is a meritless defense to the...
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