U.S. v. Brown

• Decision Date: 28 December 1994
• Docket Number: No. 91-3358,91-3358
• Citation: 40 F.3d 1218
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Robin O. BROWN, Thomas Edwin Cooke, Sr., James H. Lynch, Byron L. Kielmeyer, Paul Wayne Collier, Judy A. Carter, Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1218

40 F.3d 1218

UNITED STATES of America, Plaintiff-Appellee, v. Robin O. BROWN, Thomas Edwin Cooke, Sr., James H. Lynch, Byron L. Kielmeyer, Paul Wayne Collier, Judy A.

Carter, Defendants-Appellants.

No. 91-3358.

United States Court of Appeals, Eleventh Circuit.

Dec. 28, 1994.

E. Brian Lang, Mann, Lang & Staples, Pensacola, FL, for Brown.

Sheldon Perhacs, Birmingham, AL, for Cooke.

Stephen E. Sutherland, Pensacola, FL, for Kielmeyer.

Stephen P. Preisser, Asst. U.S. Atty., Pensacola, FL, for appellee.

Dana C. Matthews, court-appointed, Destin, FL, for Judy Carter.

Donald S. Modesitt, court-appointed, Tallahassee, FL, for Lynch and Collier.

Appeal from the United States District Court for the Northern District of Florida.

Before HATCHETT and ANDERSON, Circuit Judges, and DYER, Senior Circuit Judge.

HATCHETT, Circuit Judge:

Appellants raise several claims challenging their convictions for involvement in an insurance fraud scheme. We reject all of the appellants' claims and affirm their convictions except for Byron Kielmeyer. ¹ We reverse Kielmeyer's convictions, finding that the evidence against him was insufficient.

FACTS

In December, 1986, Kielmeyer approached Donald Hindes, an owner of an insurance agency in Ohio. Kielmeyer told Hindes that he had a contact, Transportation Services, Inc. (TSI), that could give him business placing insurance applications for trucking companies. The two reached an agreement whereby Hindes sponsored Kielmeyer and covered all of his office expenses. Reciprocally, Kielmeyer split with Hindes the commissions that he received from the insurance companies for placing the TSI-generated business.

Hindes did not know, however, that Kielmeyer's contact, TSI, had masterminded a complicated scheme to defraud trucking companies, insurance companies, and the Interstate Commerce Commission. In simple terms, TSI's scheme involved submitting false applications to insurance companies, applications which significantly underrepresented the number of trucks in a given fleet.

Under their agreement, Kielmeyer generally handled all of the TSI business, although Hindes occasionally assisted him. In the course of this business, Kielmeyer received insurance applications from TSI. Often these applications falsely indicated that a company owned a single truck. Kielmeyer then placed these applications with Ohio insurance Sometime in January of 1987, TSI began sending applications to be placed with insurance companies outside of Ohio. This presented a problem for Hindes and Kielmeyer because they were only licensed in Ohio, and therefore could not accept commissions on these applications. Consequently, in either late January or early February, Hindes went to Destin where he negotiated a deal in which TSI would pay $1,000 for each trucking application placed outside of Ohio. Kielmeyer and Hindes split this sum evenly.

companies. In turn, TSI paid Kielmeyer a fee in addition to the commissions that he received from the insurance companies. Thus, Kielmeyer was on the payroll of TSI; he even had a TSI business card with his name typed on it. Kielmeyer also visited the TSI headquarters in Destin, Florida on approximately three to five occasions.

Under this arrangement, Kielmeyer attempted to find out-of-state insurance agents to place the trucking applications that TSI sent to him. In February, Kielmeyer contacted Ronald Allen, an Indiana insurance agent. Kielmeyer sent Allen approximately six to eight trucking applications for placement with insurance companies. Allen proceeded to place them until he received information from an insurance company indicating that the applications might not be legitimate. He then wrote Kielmeyer a letter dated March 8, 1987, in which he told Kielmeyer not to send him anymore applications.

In March, Kielmeyer contacted Robert Koch, an insurance agent in Virginia. Kielmeyer asked Koch to place three trucking applications for insurance. After Koch placed the third application, he "became aware of the fact there was something untoward here." It is not clear whether Koch ever voiced his concerns to Kielmeyer.

Also in March, Kielmeyer asked Walter Turner, an Illinois insurance agent, to place three trucking applications. After submitting two applications, Turner did some investigating which led him to question the veracity of the second application. Turner called Kielmeyer to voice his concerns. He also wrote a letter to Kielmeyer dated April 22, 1987, in which he stated: "We have come to the conclusion that this type of business will not fit within our agency structure. We see several problems cropping up including improper filings, gaps in coverage, and a financial risk to this agency due to possible bad checks." ²

On March 23, before Kielmeyer received Turner's letter, Hindes sent TSI the following correspondence:

Effective immediately I wish to terminate all transactions concerning your long haul truck business.

The reason being we have had several complaints from companies regarding discrepancy in the number of units insured opposed to the number of units owned. We have asked you and the insureds repeatedly to provide us with the information on the nonowned lease units and I feel that this has been ignored. I truly do not understand the entire concept and until it is clarified I would rather not be involved. Please do not take this personally.

On March 30, agents of the Federal Bureau of Investigation (FBI) executed a search warrant at TSI's Destin offices and proceeded to shut down the operation.

PROCEDURAL HISTORY

On April 13, 1989, a grand jury in the Northern District of Florida returned a seventy-count indictment charging eleven defendants with: racketeering (18 U.S.C. Sec. 1961(1)(C) and (D)); mail fraud (18 U.S.C. Sec. 1341); wire fraud (18 U.S.C. Sec. 1343); and interstate transportation of stolen property (18 U.S.C. Sec. 2314). Kielmeyer was charged in eleven of the seventy counts. He was the only defendant not to be charged with the racketeering violations.

Trial commenced on January 7, 1991. During the trial, the government moved to dismiss one of the eleven counts alleged against Kielmeyer. On February 22, the

jury convicted Kielmeyer on the remaining ten counts: six counts of mail fraud; three counts of interstate transportation of stolen property; and one count of wire fraud. Kielmeyer then moved for a judgment of acquittal. The district court denied his motion. On April 10, the district court sentenced Kielmeyer to two years probation and a $500 special monetary assessment.

CONTENTIONS

Kielmeyer contends that the evidence failed to show that he knowingly engaged in any fraudulent activity. Thus, the government has failed to prove an essential element of the charged offenses.

The government responds that the jury reasonably inferred from the evidence that Kielmeyer knew the applications contained false information and that he therefore intended to participate in the fraudulent scheme. Thus, the element of knowledge and intent has been satisfied and the convictions should stand.

ISSUE

The issue for review is whether the evidence presented at trial sufficiently proved that Kielmeyer knowingly and intentionally engaged in mail fraud, wire fraud, and the interstate transportation of stolen property.

DISCUSSION

To establish that Kielmeyer committed mail fraud, the government had to prove that he: (1) intentionally participated in a scheme to defraud; and (2) used the mails to further that scheme. 18 U.S.C. Sec. 1341; United States v. Wingate, 997 F.2d 1429, 1432 (11th Cir.1993). Likewise, in order to establish that Kielmeyer committed wire fraud, the government had to prove that he: (1) intentionally participated in a scheme to defraud; and (2) used wire communications to further that scheme. 18 U.S.C. Sec. 1343; Belk v. United States, 868 F.2d 1208, 1211 (11th Cir.1989) ("The wire fraud statute tracks the language of the mail fraud statute ... The statutes are given a similar construction and are subject to the same substantive analysis."). "A conviction under 18 U.S.C. Sec. 2314 requires '(1) knowledge that certain property has been stolen or obtained by fraud, and (2) transporting it, or causing it to be transported, in interstate commerce.' " United States v. Hartley, 678 F.2d 961, 986 (11th Cir.1982), cert. denied, 459 U.S. 1170, 103 S.Ct. 815, 74 L.Ed.2d 1014 (1983) (quoting Pereira v. United States, 347 U.S. 1, 9, 74 S.Ct. 358, 363, 98 L.Ed. 435 (1954)). Thus, in order to convict Kielmeyer of these three crimes, the government had to show that he knew of and intended to participate in TSI's fraudulent scheme.

Kielmeyer contends that the evidence was insufficient to establish culpable knowledge and intent. He claims that he did not know TSI was sending him applications containing fraudulent information and that he had no reason to doubt the veracity of such information. Furthermore, Kielmeyer argues that as soon as he received information regarding possible impropriety, he and Hindes terminated business with TSI.

Kielmeyer's contention that the record contains insufficient "evidence to support the jury's verdict is a question...