U.S. v. F.J. Vollmer & Co., Inc.
| Citation | 1 F.3d 1511 |
| Decision Date | 30 July 1993 |
| Docket Number | 92-2322,Nos. 92-2713,s. 92-2713 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. F.J. VOLLMER & COMPANY, INC., and Kenneth L. Nevius, Defendants-Appellants. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
Frances C. Hulin, Asst. U.S. Atty. (argued), Danville, IL, for U.S. in No. 92-2322.
Tom Schanzle-Haskins (argued), Nathan P. Maddox, Giffin, Winning, Cohen & Bodewes, Springfield, IL, for Kenneth L. Nevius.
Frances C. Hulin, Asst. U.S. Atty. (argued), Danville, IL, Rodger A. Heaton, Asst. U.S. Atty. (argued), Springfield, IL, for U.S. in No. 92-2713.
Steven F. Molo (argued), Bruce R. Braun, Winston & Strawn, Chicago, IL, Rex L. Reu, Bloomington, IL, for F.J. Vollmer & Co.
Before CUMMINGS and CUDAHY, Circuit Judges, and ESCHBACH, Senior Circuit Judge.
In this direct criminal appeal, the corporate defendant and individual defendant challenge their convictions for conspiracy to defraud the United States and for mail fraud. The individual defendant also appeals his conviction for false statement. We have jurisdiction pursuant to 28 U.S.C. Sec. 1291. We affirm in part, reverse in part, and reverse and remand in part.
F.J. Vollmer & Company ("F.J. Vollmer") holds a federal firearms license, and eighty percent of its business is buying and selling firearms. Kenneth L. Nevius ("Nevius"), a Captain on full-time active duty in the Illinois National Guard, and F.J. Vollmer were charged by indictment 1 with conspiracy to defraud the United States in violation of 18 U.S.C. Sec. 371 (Count 1), and mail fraud in violation of 18 U.S.C. Sec. 1341 (Counts 14, 15, 16, 17 and 18). Nevius was also charged with making a false statement in violation of 18 U.S.C. Sec. 1001 (Count 5). 2 All of the charges arose from the defendants' participation in the purchase and resale of Steyr AUG-SA rifles from Gun South, Inc. ("GSI"), a firearms importer.
Nevius entered a conditional plea of guilty to Counts 1, 5, and 18, reserving the right to appeal the district court's denial of his motion to dismiss the indictment. Following a jury trial, Robert Vollmer was acquitted of all counts against him. F.J. Vollmer was acquitted of two counts of mail fraud, but found guilty of three counts of mail fraud and one count of conspiracy. F.J. Vollmer filed motions for judgment of acquittal or, in the alternative, for a new trial. The district court denied these motions. 792 F.Supp. 616.
The Secretary of the Treasury, Nicholas Brady, acting through the Bureau of Alcohol Tobacco and Firearms ("BATF"), imposed a temporary ban on the importation of various semi-automatic rifles, including the Steyr AUG-SA. At that time, GSI held valid BATF permits for the importation of Steyr AUG-SA rifles and had already remitted payment to the manufacturer for over 1,000 rifles. When the Steyr AUG-SA rifles arrived in the United States, however, they were seized by the United States Customs Service.
GSI filed suit against the Secretary of the Treasury in the Northern District of Alabama, seeking to enjoin the government from interfering with the delivery of the firearms. The district court granted the injunctions. Gun South, Inc. v. Brady, 711 F.Supp. 1054 (N.D.Ala.1989). On appeal, the United States Court of Appeals for the Eleventh Circuit reversed the district court's order, finding that BATF was acting within its authority in imposing the temporary import ban. Gun South, Inc. v. Brady, 877 F.2d 858 (11th Cir.1989).
Following the Eleventh Circuit's decision, the import ban on Steyr AUG-SA rifles became permanent. The ban bars private parties from importing Steyr AUG-SA rifles. Government agencies such as the National Guard remain free to import the rifles for their official use. 18 U.S.C. Sec. 925(a)(1). Once a government agency lawfully imports a firearm under section 925(a)(1), the agency is not required to retain the firearm for any specific period of time, and the agency remains free to resell it to third parties.
On remand from the Eleventh Circuit, GSI and BATF entered into a voluntary settlement agreement pursuant to Fed.R.Civ.P. 41(a)(1)(ii). This agreement was reduced to a "Stipulation and Order" entered by the Alabama district court. Under the terms of the agreement, GSI took possession of the rifles and agreed to sell the firearms only to law enforcement officers or agencies after it obtained advanced written permission from BATF for each sale. To obtain that approval, each prospective purchaser had to submit a purchase order certifying that the rifle would be used in the officer's official duties and that the rifle was not being purchased for purposes of transfer or resale. A supervisory official also had to certify that the law enforcement officer could use the rifle in connection with his or her official duties and that the agency's policies allowed officers to carry and use personally owned firearms.
In the summer of 1990, Nevius saw a GSI advertisement in the Shotgun News, offering Steyr AUG-SA rifles for sale to law enforcement personnel at a price of $1,380. He also saw F.J. Vollmer's advertisement, which stated that it would pay $2,200 for new Steyr AUG-SA rifles. Nevius then contacted GSI and confirmed that as a military officer he was eligible to purchase a Steyr AUG-SA rifle.
Nevius obtained an information packet from GSI setting forth formats for the various documents required to accompany a purchase order. Nevius prepared the necessary correspondence on his National Guard unit's stationery to purchase two Steyr AUG-SA rifles, including a signed statement that the firearms were being purchased in connection with his official duties and not for the purpose of resale. He then obtained the required supervisory certification from a superior officer and ordered the rifles using funds from his savings account. Upon receiving the rifles, Nevius took them to F.J. Vollmer and sold them.
A few weeks later, Nevius put together a second transaction, again for two rifles. Nevius asked Sergeant James McCabe, one of his subordinates, to sign the necessary purchase order. Nevius signed the supervisory certification himself and again withdrew money from his savings account to finance the purchase.
Several months later, Nevius arranged another purchase, this time for eight rifles. Because there was a limit of two rifles per purchaser, Nevius approached four subordinates to sign the purchase orders. All four agreed and signed statements that the firearms were being purchased in connection with their official duties and not for resale. In exchange for their signatures, Nevius agreed to pay each of them either $100 or $200. (Tr. 345). To finance the transaction, Nevius borrowed money from the First National Bank of Taylorville, using an automobile as collateral.
Over the next seven months, Nevius put together the documentation for five more transactions, following the same format. In all, Nevius acquired a total of 60 Steyr AUG-SA assault rifles and 11 Steyr AUG-SA rifle components known as special receivers. The receivers were classified as assault rifles and were also subject to the ban. All the assault rifles and receivers, save one Steyr AUG-SA rifle that Nevius retained for his personal collection, were delivered to F.J. Vollmer.
In the final transaction, Nevius ordered fourteen rifles. After Nevius picked up the packages at the United Parcel Service ("UPS") office, he was approached by BATF agents. The agents questioned him first at the UPS office and then at his home. They seized the rifles and receivers just delivered as well as the Steyr AUG-SA rifle from Nevius' personal collection.
Two days later, a BATF agent came to Nevius' home, and Nevius agreed to cooperate with BATF. While the agent was with him at his home, Nevius called Robert Vollmer and made arrangements to deliver the fourteen rifles and seven receivers. Both the telephone conversation and the subsequent delivery were recorded by BATF agents. This delivery took place during regular business hours and the tape recording reflects conversation between Nevius and F.J. Vollmer employees about the possibility of "getting into trouble".
Nevius and F.J. Vollmer both filed motions to dismiss the indictment (R. 29, 32), which the district court denied. Nevius then entered a conditional plea of guilty to Count 1 (conspiracy), Count 5 (false statement) and Count 18 (mail fraud) under which Nevius reserved the right to appeal the denial of his motion to dismiss the indictment.
The jury acquitted Robert Vollmer, the only agent of F.J. Vollmer prosecuted, of all six counts against him and acquitted the corporation of the mail fraud counts arising from two of the transactions. F.J. Vollmer was found guilty of mail fraud on three counts and of conspiracy to defraud the United States. Following the return of the verdicts, the court did not immediately accept them, and counsel for F.J. Vollmer requested that the jury be polled. However, after an exchange regarding a motion for acquittal, the district court dismissed the jury without polling it.
On appeal, F.J. Vollmer raises seven issues, the first three of which Nevius adopts. F.J. Vollmer argues: (1) that the district court erred in imposing criminal liability solely on the basis of a civil settlement agreement; (2) that the BATF exceeded its authority when it entered the settlement agreement; (3) that the convictions are based on a de facto agency rule that was not promulgated in compliance with the Administrative Procedures Act (APA); (4) that the government failed to allege or prove that the conspiracy interfered with a lawful government function; (5) that the government failed to allege or prove that the mail fraud deprived the government of a property right; (6) that the district court deprived F.J. Vollmer of its Sixth Amendment right to a unanimous verdict by failing to poll the jury; and (7) that the district court erred...
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