U.S. v. Blackmon, Nos. 1182

CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)
Writing for the CourtBefore FEINBERG, Chief Judge, MINER and MAHONEY; MAHONEY
Citation839 F.2d 900
Parties, 24 Fed. R. Evid. Serv. 1123 UNITED STATES of America, Appellee, v. Derek BLACKMON, Sidney Jones, Tyrone Stephens and Cecilia Grace Roland, Defendants-Appellants. to 1185, Dockets 86-1427, 86-1451 to 86-1453.
Docket NumberNos. 1182
Decision Date09 February 1988

Page 900

839 F.2d 900
56 USLW 2510, 24 Fed. R. Evid. Serv. 1123
UNITED STATES of America, Appellee,
v.
Derek BLACKMON, Sidney Jones, Tyrone Stephens and Cecilia
Grace Roland, Defendants-Appellants.
Nos. 1182 to 1185, Dockets 86-1427, 86-1451 to 86-1453.
United States Court of Appeals,
Second Circuit.
Argued May 27, 1987.
Decided Feb. 9, 1988.

Page 901

Baruch Weiss, Asst. U.S. Atty., S.D.N.Y. (Rudolph W. Giuliani, U.S. Atty., S.D.N.Y., Kenneth Roth, Asst. U.S. Atty., of counsel), for appellee.

Douglas F. Eaton, New York City, for defendant-appellant Derek Blackmon.

Barry Krinsky, New York City, for defendant-appellant Sidney Jones.

Donald E. Nawi, New Rochelle, N.Y., for defendant-appellant Tyrone Stephens.

David Seth Michaels, Spencertown, N.Y., for defendant-appellant Cecilia Grace Roland.

Before FEINBERG, Chief Judge, MINER and MAHONEY, Circuit Judges.

MAHONEY, Circuit Judge:

This is an appeal from judgments of conviction entered in the United States District Court for the Southern District of New York after a jury trial before Judge Charles S. Haight, Jr. Derek Blackmon appeals from his convictions on one count

Page 902

of conspiracy to commit wire fraud, 18 U.S.C. Sec. 371 (1982), two counts of substantive wire fraud, 18 U.S.C. Secs. 1343 and 2 (1982), fifteen counts of bank fraud, 18 U.S.C. Secs. 1344 (Supp. IV 1986) and 2 (1982), one count of possession of fifteen or more unauthorized access devices with intent to defraud, 18 U.S.C. Secs. 1029(a)(3) (Supp. IV 1986) and 2 (1982), one count of possession of five or more identification documents with intent to use them unlawfully, 18 U.S.C. Secs. 1028 (a)(3) (1982 and Supp. IV 1986) and 2 (1982), and one count of making a false statement, 18 U.S.C. Sec. 1001 (1982). Sidney Jones appeals from his convictions on one count of conspiracy to commit wire fraud, two counts of substantive wire fraud, fifteen counts of bank fraud, one count of possession of fifteen or more unauthorized access devices with intent to defraud, one count of possession of five or more identification documents with intent to use them unlawfully, and one count of contempt for violating conditions of bail, 18 U.S.C. Sec. 401 (1982). Tyrone Stephens appeals from his convictions on one count of conspiracy to commit wire fraud, two counts of substantive wire fraud, and twelve counts of bank fraud. Cecilia Grace Roland appeals from her convictions on one count of conspiracy to commit wire fraud, two counts of substantive wire fraud, and eleven counts of bank fraud. In various combinations of concurrent and consecutive sentences, Blackmon and Jones were sentenced to ten years imprisonment and five years probation, Stephens was sentenced to seven years imprisonment and five years probation, and Roland was sentenced to eighteen months imprisonment and five years probation.

All defendants-appellants contend that (1) the bank fraud convictions must be reversed because the statute does not reach the conduct in which they engaged, (2) the jury was erroneously instructed concerning the vicarious and retroactive liability of coconspirators, (3) the trial judge erroneously failed to instruct the jury that the interstate nature of a wire communication by a third party must be foreseeable under the wire fraud statute, and (4) the trial judge improperly responded to a note from the jury without first consulting counsel. Stephens argues, inter alia, that the trial judge erroneously admitted hearsay statements made by a coconspirator. Blackmon and Jones contend, inter alia, that the trial judge erroneously refused to instruct the jury that the access device statute requires intent to defraud a credit card holder or a credit card company, and assert other errors pertinent to their remaining convictions.

We vacate the convictions of all defendants as to the two substantive wire fraud counts and the convictions of Blackmon and Jones as to the count alleging possession of fifteen or more access devices with intent to defraud, reverse the convictions of all defendants with respect to the fifteen bank fraud counts, affirm the remaining convictions, and remand for resentencing and any other proceedings that may ensue.

Background

The indictment alleged an elaborate scheme by the appellants to defraud six victims in New York City during a period from March to November, 1985. 1 The scheme is a variation of a street confidence game known as the "pigeon drop." The colorful details of the game are described in a portion of the district court opinion, United States v. Jones, 648 F.Supp. 225, 226-28 (S.D.N.Y.1986), that is set forth in the margin. 2 Essentially, the game involved

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persuading wealthy elderly women that they had "found" cash earmarked for Iran or the PLO, and then convincing the women to withdraw their own money from banks in an amount equivalent to their "share" of the found cash, convert that money into foreign currency, and give the foreign currency to the appellants for high-return foreign investment. The victims, of course, never saw either their share of the found money or their own money again. The six victims, who were defrauded of a total of $1,197,000, were: Gloria Rosenfeld, April, 1985; Josephine Palumbo, July, 1985; Simone Putnam, August, 1985; Peggy St. Lewis, September, 1985; Sylvia Roberts, September, 1985; and Hadassah Feit, October, 1985.

The jury found all appellants guilty on one count of conspiracy to commit wire fraud, and two counts of substantive wire fraud in connection with the fraud on Peggy St. Lewis, which involved two wire transfers of money by the victim from Florida to New York. The jury also found the appellants guilty on numerous counts each of bank fraud in connection with the

Page 904

frauds on the six victims, 3 which involved the withdrawal of funds by the victims from federally insured banks.

The government also established that nineteen credit cards, two bank cards and nineteen governmental identification documents were found in Jones' apartment, in a suitcase belonging to Blackmon. On the basis of this evidence, both Blackmon and Jones were convicted of possession of fifteen or more unauthorized access cards with intent to defraud, and possession of five or more government identification documents with intent to use them unlawfully. The government also established that Jones left New York City for Alabama on November 8, 1985, one day after his arrest, in violation of his bail condition that he not depart from the southern or eastern districts of New York, and the jury convicted Jones of contempt. Finally, the Government established that Blackmon checked the answer "no" to a question on a CJA form (for court-appointed counsel) asking whether he had any cash on hand or money in a savings or checking account, at a time when he in fact had $41,000 in a safe deposit box held under an alias, and the jury convicted Blackmon of making a false statement in violation of 18 U.S.C. Sec. 1001 (1982).

Discussion

A. Bank Fraud.

This is the first case in which this court has had occasion to construe the relatively new federal bank fraud statute, 18 U.S.C. Sec. 1344 (Supp. IV 1986). Appellants contend that their bank fraud convictions should be reversed because neither the language of that statute nor its legislative history evinces a legislative intent to cover situations where money is merely withdrawn legally from a federally insured bank by a victim and where the bank itself is in no way victimized. We agree. Although the precise contours of the new law may be undefined as yet, we are confident that the conduct involved here is not within the intended reach of the legislation.

We begin, as we must, with the language of the statute, for if its language is unambiguous, that ordinarily ends our inquiry. United States v. Turkette, 452 U.S. 576, 580, 101 S.Ct. 2524, 2527, 69 L.Ed.2d 246 (1981). The district court concluded that section 1344 has "plain and unambiguous meanings which squarely reach defendants' conduct." United States v. Jones, 648 F.Supp. 225, 231 (S.D.N.Y.1986). We do not agree.

Subsection (a) of the statute reads:

Whoever knowingly executes, or attempts to execute, a scheme or artifice--

(1) to defraud a federally chartered or insured financial institution; or

(2) to obtain any of the moneys, funds, credits, assets, securities or other property owned by or under the custody or control of a federally chartered or insured financial institution by means of false or fraudulent pretenses, representations, or promises, shall be fined not more than $10,000, or imprisoned not more than five years, or both.

18 U.S.C. Sec. 1344(a) (Supp. IV 1986) (emphasis added).

It is true that the victims' money in this case had at one time been "under the custody or control" of federally insured banks. This, however, proves too much. The property obtained by the defendants' scheme was the foreign currency purchased by the victims with money legally withdrawn from the banks. At the time the foreign currency was obtained, it simply was not in any way under the control or custody of the banks. If the statute applied to these facts, it could apply to any situation where property purchased with money legally withdrawn from a federally insured bank was thereafter fraudulently obtained. The statute does not "plainly" yield such an extraordinary result.

Indeed, the government on appeal concedes that the property must be obtained at a time when the bank has custody or control

Page 905

of the property. The government argues that this element is met by virtue of the fact that the victims acted as the defendants' "agents" in withdrawing the money from the banks. The government cites 18 U.S.C. Sec. 2(b) (1982), which states that "[w]hoever willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal." As we have observed, "[t]his section is based on the precept...

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  • U.S. v. Richards, Docket No. 98-7676
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • February 10, 2000
    ...need not have been reasonably foreseeable. See United States v. Lindemann, 85 F.3d 1232, 1241 (7th Cir. 1996); United States v. Blackmon, 839 F.2d 900 (2d Cir. 1988); cf. United States v. Kelly, 569 F.2d 928, 934 (5th Cir. 1978)(holding that the interstate transportation offense, 18 U.S.C. ......
  • U.S. v. Brandon, Nos. 92-1447 and 92-1465
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • September 7, 1993
    ...a federally insured bank, Bay Loan, was victimized or exposed to a risk of loss by the scheme to defraud. See United States v. Blackmon, 839 F.2d 900, 906 (2d Cir.1988). This, however, is not seriously disputed in this case. Concerns about extending the reach of the bank fraud statute into ......
  • USA v. Mullins, Nos. 09-1031, 09-1091.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • July 29, 2010
    ...doesn't require any degree of mens rea. See United States v. Lindemann, 85 F.3d 1232, 1241 (7th Cir.1996); United States v. Blackmon, 839 F.2d 900, 907 (2d Cir.1988); United States v. Bryant, 766 F.2d 370, 375 (8th Cir.1985) (also noting exception when, absent interstate wire transmission, ......
  • U.S. v. Salerno, Nos. 91-106
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • January 31, 1989
    ...area. In addition to United States v. Rahme and United States v. Paone, cited immediately supra in Persico, see United States v. Blackmon, 839 F.2d 900, 912-13 (2d Cir.1988) (statements that brief a coconspirator on current status of conspiracy are in furtherance of conspiracy); United Stat......
  • Request a trial to view additional results
105 cases
  • U.S. v. Richards, Docket No. 98-7676
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • February 10, 2000
    ...need not have been reasonably foreseeable. See United States v. Lindemann, 85 F.3d 1232, 1241 (7th Cir. 1996); United States v. Blackmon, 839 F.2d 900 (2d Cir. 1988); cf. United States v. Kelly, 569 F.2d 928, 934 (5th Cir. 1978)(holding that the interstate transportation offense, 18 U.S.C. ......
  • U.S. v. Brandon, Nos. 92-1447 and 92-1465
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • September 7, 1993
    ...a federally insured bank, Bay Loan, was victimized or exposed to a risk of loss by the scheme to defraud. See United States v. Blackmon, 839 F.2d 900, 906 (2d Cir.1988). This, however, is not seriously disputed in this case. Concerns about extending the reach of the bank fraud statute into ......
  • USA v. Mullins, Nos. 09-1031, 09-1091.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • July 29, 2010
    ...doesn't require any degree of mens rea. See United States v. Lindemann, 85 F.3d 1232, 1241 (7th Cir.1996); United States v. Blackmon, 839 F.2d 900, 907 (2d Cir.1988); United States v. Bryant, 766 F.2d 370, 375 (8th Cir.1985) (also noting exception when, absent interstate wire transmission, ......
  • U.S. v. Salerno, Nos. 91-106
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • January 31, 1989
    ...area. In addition to United States v. Rahme and United States v. Paone, cited immediately supra in Persico, see United States v. Blackmon, 839 F.2d 900, 912-13 (2d Cir.1988) (statements that brief a coconspirator on current status of conspiracy are in furtherance of conspiracy); United Stat......
  • Request a trial to view additional results

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