U.S. v. Alexander

• Decision Date: 24 August 1984
• Docket Number: No. 83-1405,83-1405
• Parties: Bankr. L. Rep. P 70,011 UNITED STATES of America, Plaintiff-Appellee, v. Robert D. ALEXANDER, Sr., Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 472

743 F.2d 472

Bankr. L. Rep. P 70,011

UNITED STATES of America, Plaintiff-Appellee, v. Robert D. ALEXANDER, Sr., Defendant-Appellant.

No. 83-1405.

United States Court of Appeals Seventh Circuit.

Argued Feb. 13, 1984.

Decided Aug. 24, 1984.

Bradley W. Swearingen, Moehle, Smith & Day, Ltd., Peoria, Ill., for defendant-appellant.

L. Lee Smith, Asst. U.S. Atty., Peoria, Ill., for plaintiff-appellee.

Before PELL and POSNER, Circuit Judges, and PARSONS, Senior District Judge. ^*

PELL, Circuit Judge.

Defendant-appellant, Robert D. Alexander, Sr., appeals from his conviction for violation of the federal mail and wire fraud statutes, 18 U.S.C. Secs. 1341, 1343, and the sentence imposed pursuant to the convictions. Defendant raises three main grounds for reversal. First, he claims that an initial administrative decision in his favor on a Postal Service complaint to stop his mail collaterally estops the Government to prosecute the criminal charges against him. Second, he contends that the instructions tendered by the Government and given by the trial court with respect to the defense of good faith were erroneous. Third, he alleges that the special conditions of probation imposed by the trial court were unduly restrictive and contravened the provisions of the Bankruptcy Code.

I. THE FACTS

The nine-count indictment against defendant, an Illinois resident, arose from his business of reconditioning, repairing, selling, and installing heavy duty truck scales used by his customers to weigh farm and other commodities. The indictment, handed down on November 16, 1982, charged defendant with a scheme to defraud and to obtain money by means of false and fraudulent promises. For twenty-five years, defendant owned and operated Peoria Scale Service. He sold and installed approximately 1100 scales from the inception of his business until creditors forced him into involuntary bankruptcy on March 3, 1982. The State of Illinois had revoked his license to repair scales in March 1981, but much of his business had always come from outside Illinois, and he continued to do business until the creditors filed their bankruptcy petition.

On August 12, 1982, after defendant's creditors filed their petition for bankruptcy but before either the discharge in bankruptcy or the indictment, the United States Postal Service filed an administrative complaint against Peoria Scale Service. The complaint, filed pursuant to 39 U.S.C. Sec. 3005, sought to enjoin defendant's company from receiving any mail connected to an alleged scheme to obtain money through the mails by means of false pretenses. On December 17, 1982, after a hearing, the administrative law judge denied the requested injunction, finding that the Postal Service had failed to prove that the company had been involved in a scheme to defraud. Between the time the Postal Service filed its complaint and the decision of the administrative law judge, the Government indicted defendant on criminal charges based upon most of the same transactions through which the Postal Service had sought to establish its right to an injunction.

Defendant contended before the trial court that the Postal Service's unsuccessful complaint acted as a bar to the fraud charges and that the decision of the administrative law judge amounted to collateral estoppel against the Government from relitigating the claims of fraud. The district court denied defendant's motion to dismiss the indictment. The court held that the purposes of the two proceedings were sufficiently different that the Postal Service's action did not preclude institution of criminal charges, despite the similarity of the issues involved. In his appellate briefs, defendant again contends that, under the doctrine of collateral estoppel, the mail fraud counts should have been dismissed.

A four-day jury trial took place in January 1983. The Government produced a substantial number of witnesses who had a business relationship with defendant. Although the evidence produced by the examination of these witnesses varied, the testimony of David Ungeheuer typified the evidence that the Government produced. Ungeheuer read defendant's advertisement for used scales in a farm journal and called defendant, who said that he would charge $16,000 for the desired scale. Similar new scales cost between $25,000 and $35,000. Several weeks later, defendant called Ungeheuer and offered to sell the same scale for $14,000, including delivery and installation at Ungeheuer's convenience, if he agreed to buy the scale immediately. In October 1981, he sent to defendant $5,200 of a $10,500 down payment, with the balance of the down payment due upon delivery. Again, the parties indicated that the work was "to be started at buyer's convenience." Ungeheuer requested that defendant perform the work in the late fall of 1981. Nobody from defendant's company ever came to Ungeheuer's property to begin the installation process, nor did he ever receive any refund. Through this and other testimony, a pattern developed of defendant charging very low prices, demanding large down payments, and then never performing any substantial work on the projects.

After closing arguments, the trial judge instructed the jury. The charge included two instructions to which defendant made timely objections at trial and which defendant now presses as a ground for reversal. Government's Instruction 20 stated: "An honest belief by the Defendant that he will ultimately be able to perform what he has promised is not in itself a defense to the crimes charged." Defendant contends that this instruction is not legally accurate and unduly prejudiced the good faith defense that formed the basis of defendant's theory of the case. The next instruction given, Government's Instruction 21, stated: "It is no defense to the crimes charged that not all of the persons with whom the Defendant dealt in his business were defrauded." Defendant claims that Instruction 21 was unnecessary, misleading, and prejudicial because it amounted to an unwarranted instruction to disregard the testimony from satisfied customers. Defendant contends that the instruction should have stated that such testimony, while relevant, was not dispositive. The next instruction, as to which defendant does not claim error, stated: "If the jury should find that, at the time made, the representations and promises which the Government alleges to be fraudulent, were made in good faith, the fact that any such representations or promises were later unfulfilled does not warrant a verdict of guilty." Defendant contends that this sequence of instructions deprived him of his right to a fair trial.

The jury returned a verdict of guilty on five of the nine counts. After the judge denied defendant's post-trial motions, he imposed a suspended sentence and placed defendant on five-years' probation on each count, with the counts to run concurrently. Among the five special conditions of probation, defendant objects to two. First, the judge ordered defendant to make restitution of $47,000 total, during the course of the probation, to the victims named in the counts of which the jury found defendant guilty. Defendant objects to the condition on the ground that it avoids the effect of the relief ordered by the bankruptcy judge, who had discharged the claims of all of the victims. Second, the judge prohibited defendant from "maintaining a proprietary interest in any business that sells, replaces, or installs either permanent or portable weigh scales." Defendant contends that the second condition deprives him of any reasonable opportunity to fulfill the first condition, assuming the validity of that condition, because the scale business had been his sole occupation for over thirty years and his age, sixty-two, makes it unlikely that he could secure substantial gainful employment in another endeavor.

After submission of the briefs to this court, but before the oral argument, the Postal Service Judicial Officer reversed the decision of the administrative law judge and enjoined delivery of any mail to Peoria Scale Service that related to the sale and installation of scales. At oral argument, counsel for defendant continued to assert that the proceeding before the Postal Service administrative law judge should have precluded the prosecution of criminal charges. Although counsel conceded that he had no direct authority for the proposition, he alleged, nonetheless, that the initial administrative decision had a res judicata effect upon the subsequent criminal trial, despite the fact that the initial decision was subject to further agency review.

II. INSUFFICIENT EVIDENCE

Defendant's first claim is that the evidence was insufficient to convict him of the crimes charged. The claim merits only brief discussion. The standard of review of claims of insufficient evidence is the traditional reasonable doubt test. See, e.g., United States v. Moya, 721 F.2d 606, 609 (7th Cir.1983), cert. denied, --- U.S. ----, 104 S.Ct. 1312, 79 L.Ed.2d 709 (1984). That is, we must determine "whether, after reviewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979) (emphasis in original). This standard preserves "the factfinder's role as weigher of the evidence." Id.

The evidence established a pattern of conduct by defendant from which the jury could infer a scheme to defraud. Most of the acts alleged in the indictment fit into the same pattern. Defendant advertised in a number of regional farm journals. His prices were substantially lower than those available from other scale dealers for comparable scales. When a customer would contact defendant about installation of a scale, defendant would assure the customer that he had, or soon could obtain, a scale to fulfill the customer's requirements....