U.S. v. Hornick, s. 1369
| Decision Date | 07 August 1991 |
| Docket Number | 1222 and 1223,Nos. 1369,D,s. 1369 |
| Citation | 942 F.2d 105 |
| Parties | -5588 UNITED STATES of America, Appellee, v. Thomas H. HORNICK, Dolores Hornick, Hastings, Youket, M. Merrill Miller, Frank J. Marano and Richard T. Gow, Defendants, Thomas H. Hornick, Dolores Hornick, M. Merrill Miller and Frank J. Marano, Defendants-Appellants. ockets 90-1112, 90-1113 and 90-1115. |
| Court | U.S. Court of Appeals — Second Circuit |
Stephen A. Sutter, Binghamton, N.Y., for defendant-appellant Frank J. Marano.
John A. Cirando, Syracuse, N.Y. (Patrick J. Haber and Ivette Iza, D.J. & J.A. Cirando, of counsel), for defendant-appellant Delores Hornick.
Gary S. Sharpe, Asst. U.S. Atty., Binghamton, N.Y. (Frederick J. Scullin, Jr., U.S. Atty., N.D.N.Y., of counsel), for appellee the U.S.
Before CARDAMONE, WALKER and FRIEDMAN, * Circuit Judges.
Thomas J. Hornick and Delores Hornick, his wife, and Frank J. Marano appeal from judgments of conviction entered in the United States District Court for the Northern District of New York (McAvoy, J.) after a jury trial. Thomas Hornick was found guilty of mail, wire and travel fraud, various crimes involving false tax returns, an obstruction of justice count, mailing a threatening letter and conspiracy to commit mail and wire fraud, in violation of 18 U.S.C. §§ 1341, 1343, 2314; 26 U.S.C. § 7206(2); 18 U.S.C. §§ 371, 1503 and 2, and 876 respectively. His wife Delores was convicted on most of the same charges. Frank Marano was convicted of fraud and conspiracy counts in violation of 18 U.S.C. §§ 1341 and 2, and 8 U.S.C. § 371.
Some would-be investors, driven first by greed that blinds them to the promptings of common sense, and then by fear, when reality inevitably intrudes, are the victims of the defendants before us on this appeal. By appealing to the victims' desire to make money without risk, the defendants, who were unscrupulous promoters, were able to sell their victims a get-rich scheme. The investors had the momentary pleasure of believing themselves discoverers of a sure path to wealth by investing in oil wells, an emotion that was swiftly supplanted by fear of loss when it became clear they had been hoodwinked and defrauded out of millions.
In 1984 defendants Thomas and Delores Hornick, together with defendant Frank Marano and several other defendants, began to sell to small investors limited partnerships in oil well projects. Promoting the partnerships through direct sales contracts, solicitation documents, radio advertisements, newsletters, and investment seminars, which emphasized Thomas Hornick's background and experience as a former Internal Revenue Service agent, they touted the tax advantages of investing in the limited partnerships. Frank Marano, a financial planning consultant and salesman in 1985 and sales manager in 1986, participated in direct sales presentations and seminars, reviewed the newsletters, and handled correspondence. Hornick's wife, Delores, attended the seminars and served as an employee or officer of some of the corporations involved in the complex scheme.
Defendants promised investors their money would be used exclusively to drill wells and that oil production revenues would return their investment in one to three years. Representing that defendants' sole profit would be 20 percent of the revenue derived from the actual production of oil, the literature and the seminars Defendants typically mailed out $100-$300 checks, characterized as either pre-production payments or as profits from the investment, in order to keep investors satisfied that their money had been invested and was generating income. They also periodically "bought-out" investors, though the money used to issue pre-production checks and the money used to "buy-out" investors was actually money invested in the oil well scam by other investors.
offered investors a written, money-back guarantee if the wells failed, or an option to transfer the investment to a producing well. The promoters also claimed these were virtually risk-free investments, and that those that bought in would have a tax sheltered write-off of up to 80 percent of the money invested
During the four years of the limited partnership the defendants told investors the projects had 37 straight successes, even though the amount of oil the wells actually generated was minuscule. The actual cost of drilling was never disclosed. Investor funds were commingled in single bank accounts and no accounting was ever given. One project was double-sold under different names, a limited partnership agreement was never filed, and the wells were registered in the state of Texas under one name and sold to investors under another. The defendants also filed partnership tax returns fraudulently claiming deductions for intangible drilling costs and equipment expenses, and caused investors to file false tax returns by sending them inaccurate information regarding their allowable share.
Most of the money obtained was not used to drill wells. The Hornicks deposited it instead in a number of bank accounts owned by corporations that they had set up, and later withdrew the investors' money and redeposited it in Delores Hornick's personal account. Out of the money generated by this swindle, only $1.1 million was actually spent on oil drilling. The 20 percent profit investors were told the promoters would be entitled to amounted only to $110,000. But from 1984 until the defendants were indicted in 1988 approximately $1.3 million went into the pockets of Delores Hornick, who spent the money on boats, jewelry, travel, and expensive automobiles.
The Hornicks and Marano have raised numerous issues on this appeal, among them challenges to the sufficiency of the evidence and to the jury instructions, a claimed denial of effective assistance of counsel, denial of the right to cross-examination, and errors in the calculation of their sentences. All of them save one are without merit and warrant no discussion; the one issue to be analyzed arises from the sentence imposed on defendant Thomas Hornick for sending threatening communications.
After investors began to bring suit against the defendants, Hornick sent letters out to other investors seeking $500 contributions toward his legal defense. When the response to this plea proved insufficient, he tried a different approach, writing that
During a series of investor meetings in Binghamton, N.Y. the matter was brought up that it was not fair that a few investors must spend personal funds to defend non-contributing investors interests in the wells. There was unanimous consent at all meetings that all investors must either contribute or face the loss of their entire investment by lapse of the lease or foreclosure of their interests in the wells. Centex will take appropriate action should you decide not to contribute to our fund.
The district court found that by mailing out these letters, Hornick had committed the offense of sending threatening communications, which carries a base offense level of 12 under Sentencing Guideline § 2A6.1(a). The sentencing judge increased that offense level to 18 because he concluded that Hornick had "engaged in conduct evidencing an intent to carry out [the] threat." U.S.S.G. § 2A6.1(b)(1).
Adopting the...
To continue reading
Request your trial
-
U.S. v. Morrison
...contemporaneously with or after the threat.' " United States v. Kirsh, 54 F.3d 1062, 1073 (2d Cir.1995) (quoting United States v. Hornick, 942 F.2d 105, 108 (2d Cir.1991)). The district court imposed the six-point enhancement for conduct evidencing an intent to carry out threats with respec......
-
U.S. v. Kirsh
...proffered as probative of such an intent must have occurred "either contemporaneously with or after the threat." United States v. Hornick, 942 F.2d 105, 108 (2d Cir.1991), cert. denied, 502 U.S. 1061, 112 S.Ct. 942, 117 L.Ed.2d 112 The district court here found that "the guns were in the ap......
-
U.S. v. Taylor
...that [he] would carry out the threat." U.S.S.G. § 2A6.1, comment. (backg'd). Taylor argues that we should follow United States v. Hornick, 942 F.2d 105 (2d Cir.1991), cert. denied, 502 U.S. 1061, 112 S.Ct. 942, 117 L.Ed.2d 112 (1992), in which the Second Circuit held that only post-threat c......
-
U.S. v. Barbour
...out his or her threat. See United States v. Hines, 26 F.3d 1469, 1474 n. 2 (9th Cir.1994). Barbour also refers us to United States v. Hornick, 942 F.2d 105 (2nd Cir.1991), cert. denied, 502 U.S. 1061, 112 S.Ct. 942, 117 L.Ed.2d 112 (1992), where the Second Circuit held that pre-threat condu......