U.S. v. Boyd, 79-1139

• Decision Date: 28 September 1979
• Docket Number: No. 79-1139,79-1139
• Parties: 4 Fed. R. Evid. Serv. 1414 UNITED STATES of America, Appellee, v. Donald C. BOYD, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 792

606 F.2d 792

4 Fed. R. Evid. Serv. 1414

UNITED STATES of America, Appellee, v. Donald C. BOYD, Appellant.

No. 79-1139.

United States Court of Appeals,

Eighth Circuit.

Submitted June 13, 1979.

Decided Sept. 28, 1979.

Thomas M. Kelly, Minneapolis, Minn., for appellant.

Thorwald H. Anderson, Jr., Asst. U. S. Atty., Minneapolis, Minn., for appellee. Andrew W. Danielson, U. S. Atty., William M. Orth, Legal Intern., Minneapolis, Minn., on brief.

Before LAY, ROSS and HENLEY, Circuit Judges.

ROSS, Circuit Judge.

Donald C. Boyd appeals from his conviction on two counts of conspiracy to defraud and 18 counts of mail fraud in violation of 18 U.S.C. §§ 371 and 1341. On appeal Boyd claims that the government failed to prove that the mailings described in the 18 mail fraud counts were sent for the purpose of executing a fraudulent scheme. He also argues that the district court ¹ erred in permitting a witness to testify while referring to a summary of his previous statement to the FBI, in submitting certain documents for jury consideration, and in imposing a five-year sentence ² on count 20.

We reverse in part, affirm in part, and remand for resentencing.

Boyd directed two organizations which received funding from the Upper Great Lakes Regional Commission (UGLRC). The UGLRC is a federally funded agency created to promote economic development in areas of Minnesota, Wisconsin and Michigan. The agency approves grant requests from semiprivate organizations and local government units for the purpose of starting private businesses or lending technical assistance to already existing businesses. Approved grantees receive a grant contract specifying the amount to be funded and a payment schedule. The payment schedule is based upon either progress reports from the organization or invoices requesting further payments.

The UGLRC approved several grants for projects known as the Northern Minnesota Small Business Development Center (NMSBDC), and the Duluth Area Economic Development Office (DAED). Donald Boyd was director of these projects, which received about $1,030,000 in federal funds through the UGLRC.

Counts 1-14 involved grant requests sent from the Minnesota Department of Economic Development and from Boyd on behalf of his organizations to the federal commission, and checks sent from the U. S. Treasury to the state agency or to Boyd in response to those requests. Although the state agency was to have served as a financial intermediary, directly receiving funds from the federal commission and passing them on to grantees for approved projects, the evidence established that Boyd's organizations at times directly received the funding from the U. S. Treasury.

Boyd hired James Manos as a consultant for projects receiving federal funds and, on a continuing basis, demanded that Manos kick back a substantial portion of his consulting fees to Boyd. These kickback transactions were the subject of Boyd's indictment on 18 counts of mail fraud, and on count 19 for conspiracy to defraud the United States.

Boyd does not challenge his conviction on count 19 but contends that the government failed to establish that the mailings described in the 18 mail fraud counts were sent for the purpose of executing the fraudulent scheme.

The mail fraud statute, 18 U.S.C. § 1341, proscribes any use of the mails "for the purpose of executing" a scheme to defraud. United States v. Maze, 414 U.S. 395, 400, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974); United States v. Cooper, 596 F.2d 327, 329 (8th Cir. 1979). Because the mail fraud statute is written to apply to any scheme to defraud in which the mails are used, it is read expansively to effectuate that purpose. United States v. Mirabile, 503 F.2d 1065, 1066 (8th Cir. 1974), Cert. denied,420 U.S. 973, 95 S.Ct. 1395, 43 L.Ed.2d 653 (1975). Mailings are considered to be in execution of a fraudulent scheme if they are "sufficiently closely related," United States v. Maze, supra, 414 U.S. at 399, 94 S.Ct. 645, or "incident to an essential part of the scheme." ³ Pereira v. United States,347 U.S. 1, 8, 74 S.Ct. 358, 362, 98 L.Ed. 435 (1954).

The evidence established that the mailings described in counts 1-14 were necessary to obtain federal funds. One element of the continuing kickback scheme was the repeated financing of the various projects Boyd controlled. Continued receipt of grant monies which Boyd could pay out to Manos as consulting fees was necessary to perpetuate and carry out this continuous scheme. Conduct is within the mail fraud statute when, as in this case, the use of the mails for the purpose of executing the flow of payoff funds is a reasonably foreseeable possibility in furthering the transaction, especially when the scheme continues and repeats over an extended period of time. See United States v. Rabbitt, 583 F.2d 1014, 1023 (8th Cir. 1978), Cert. denied, 439 U.S. 1116, 99 S.Ct. 1022, 59 L.Ed.2d 75 (1979); United States v. Brown, 540 F.2d 364, 376 (8th Cir. 1976); United States v. Minkin, 504 F.2d 350, 353 (8th Cir. 1974), Cert. denied, 420 U.S. 926, 95 S.Ct. 1122, 43 L.Ed.2d 396 (1975). Under these circumstances, the jury was entitled to find that Boyd's use of the mails to gain access to grant monies was sufficiently closely related to the continuous execution of the kickback scheme to bring his conduct within the ambit of the mail fraud statute.

Counts 15-18 described Manos' mailings to the IRS of income tax payments comprised in part of monies obtained from Boyd's organizations. The mail fraud statute may not be invoked where, as here, the mailings are "legally compelled," Parr v. United States, 363 U.S. 370, 391, 80 S.Ct. 1171, 4 L.Ed.2d 1277 (1960), and take place after the object of the scheme has been accomplished. United States v. Maze, supra, 414 U.S. at 402, 94 S.Ct. 645. We therefore reverse Boyd's convictions on counts 15-18 for mail fraud.

Boyd contends that the district court erred in permitting witness James Manos to testify while referring to a report summarizing his previous statements to the FBI. We disagree.

" The propriety of permitting a witness to refresh his memory from a writing prepared by another largely lies within the sound discretion of the trial court." United States v. Conley, 503 F.2d 520, 522 (8th Cir. 1974). Manos briefly referred to the report at defense counsel's request that he review specific check transactions shown in the report during cross-examination. He assured the court of his need to refer to the report to "put together (his specific) statements on the...