U.S. v. Feldman

Decision Date19 October 1988
Docket NumberNo. 86-5090,86-5090
Citation853 F.2d 648
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Robert FELDMAN, Defendant-Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

Richard D. Burda, Los Angeles, Cal., for defendant-appellant.

Richard M. Callahan, Asst. U.S. Atty., Los Angeles, Cal., for plaintiff-appellee.

Appeal from the United States District Court for the Central District of California.

Before TANG, BOOCHEVER and NORRIS, Circuit Judges.

BOOCHEVER, Circuit Judge:

Robert Feldman (Feldman) appeals his conviction for mail fraud, interstate transportation of funds obtained by fraud, use of a false name in furtherance of a scheme to defraud, and conducting an enterprise through a pattern of racketeering. Feldman's most substantial claims are that the district court erred in failing to give the jury a specific unanimity instruction, that the evidence of mail fraud was insufficient, that there was no proof of a RICO enterprise separate from the defendant, and that the forfeiture procedure used at trial was unconstitutional. We affirm his conviction, but remand to the district court for a determination whether Feldman is entitled to an evidentiary hearing on forfeiture.

BACKGROUND

Feldman's conviction arises out of evidence of his business dealings over a period of more than ten years. Three of Feldman's businesses in Massachusetts and a business in California suffered fires caused by arson, which resulted in Feldman's recovery of substantial insurance proceeds. In connection with his California business, he sent out financial statements to potential lenders listing sales that could not be verified. Through a complex series of financial and real estate maneuvers, occasionally using false names, Feldman concealed the insurance proceeds from the California A grand jury returned a superseding indictment charging Feldman with fourteen counts of mail fraud under 18 U.S.C. Sec. 1341 (1982), one count of interstate transportation of funds obtained by fraud under 18 U.S.C. Sec. 2314 (1982), two counts of using a fictitious name in furtherance of a scheme to defraud under 18 U.S.C. Sec. 1342 (1982), and one charge of conducting a criminal enterprise through a pattern of criminal racketeering, under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. Secs. 1962(c) and 1963 (1982).

fire from his creditors. The details of his activities are set out in the Appendix to this opinion.

The government dismissed Counts 10 and 11 of the superseding indictment (both mail fraud counts). The jury convicted Feldman on all remaining counts.

After the verdict, the court, without allowing further argument or evidence, instructed the jury on RICO forfeiture, and the jury returned a special verdict of forfeiture of $1,986,990. The court then ordered that Feldman not alienate assets as to defeat the forfeiture.

Feldman was sentenced on March 13, 1986, to concurrent terms of ten years on Counts 15 (interstate transportation of funds obtained by fraud) and 18 (RICO). The court placed Feldman on five years' probation on the remaining mail fraud counts, with the condition that Feldman make restitution to his victims in the amount of $1,986,990, the amount of the judgment of forfeiture. On the same day, the district court denied an earlier motion to dismiss the RICO count.

ANALYSIS
1. SPECIFIC UNANIMITY INSTRUCTION

Feldman contends that the proof presented at trial regarding the mail fraud scheme could be interpreted by a rational jury as either a single scheme to defraud or as multiple schemes. He claims that as a result the court should have instructed the jury that "each of the jurors must find the defendant guilty of participation in the same single scheme to defraud and that the scheme to defraud in which the defendant is found to have participated is the same scheme as the overall fraudulent scheme alleged in the indictment," quoting United States v. Mastelotto, 717 F.2d 1238, 1247 (9th Cir.1983) (emphasis in original).

Feldman's counsel did not object to the mail fraud instruction given at trial; in fact, he stipulated to the instruction as given. The court's failure to give a unanimity instruction therefore requires reversal only if it constitutes plain error, a highly prejudicial error affecting substantial rights. United States v. Payseno, 782 F.2d 832, 834 (9th Cir.1986).

The indictment charged Feldman with fourteen counts of mail fraud, all connected to his activities related to Grow Gear, a California corporation. The counts were described in the indictment as "The Looting of Grow Gear Assets," "The Arson Destruction of Grow Gear," and "The Fraudulent Transfers of Cash and Property" intended to hide the insurance proceeds from creditors. None of the Massachusetts activities was alleged as part of the scheme. The indictment describes the scheme to defraud in ten long paragraphs and then sets out the twelve mail fraud counts submitted to the jury. The alleged mailings consisted of falsified financial statements sent to Grow Gear lenders (1 and 2); insurance settlement checks (3, 6, and 8); claims for partial payment (4 and 5); a proof of loss of earnings (7); grant deeds for real property (9 and 14); and reconveyances of trust deeds (12 and 13).

Feldman admits that there was no fatal variance between the indictment and the proof at trial, because a rational jury could have found that the fraudulent transactions alleged in the indictment were all part of a single scheme. Because a rational jury also could have found more than one scheme, we must decide whether (1) the jury was properly instructed that it had to agree unanimously on a single scheme, and (2) if the instructions given were improper, they constituted plain error. Cf. Mastelotto, 717 F.2d at 1246 (where defendant does A specific instruction on unanimity is required "where it appears that a conviction might rest upon different jurors having found the existence of different facts ... where the complex nature of the evidence, a discrepancy between the evidence and the indictment, or some other particular factor creates a genuine possibility of juror confusion." United States v. Frazin, 780 F.2d 1461, 1468 (9th Cir.), cert. denied, 479 U.S. 844, 107 S.Ct. 158, 93 L.Ed.2d 98 (1986). Otherwise a general instruction on unanimity will suffice. Id.

object to instructions at trial, improper instructions require reversal unless harmless error).

Feldman's claim that the evidence was complex and that confusion resulted is not particularly persuasive. Although his real estate transactions to conceal the insurance proceeds were complicated, they had to be convoluted to avoid his creditors. The complexity therefore would not necessarily lead a jury to consider the existence of multiple schemes. The underlying purpose seems clear throughout, although Feldman's methods required the use of aliases and straw corporations. See Mastelotto, 717 F.2d at 1245 (factors for finding single conspiracy are limited in their usefulness because "the scope of a scheme to defraud is ultimately restricted ... only by the ingenuity of its participants"). He does not support his claim of resulting confusion with any action by the jury, such as requesting clarification of the instruction. See United States v. Echeverry, 698 F.2d 375, 376-77 (9th Cir.) (per curiam) (specific unanimity instruction on conspiracy required where jury indicated confusion by submitting question to judge during deliberations, and judge admitted ambiguity), modified, 719 F.2d 974 (1983). On the eighth day of trial the jury retired, and deliberated for three days on sixteen counts. How much of that time was spent on the twelve mail fraud counts is impossible to determine, and this court is not free to hypothesize about whether there was disagreement between jurors during deliberation about the existence of a single scheme. See id. at 377.

As discussed above, no discrepancy between the evidence and the indictment presents itself. Nor can we isolate another particular factor creating a genuine possibility of jury confusion. Frazin, 780 F.2d at 1468. Evidence supports the existence of a single scheme to defraud. The scheme focused on Grow Gear, with the intent of looting it, burning it, and keeping the insurance proceeds from creditors. Feldman was the single perpetrator, with Grow Gear and his creditors as victims. The time involved, 1977 through 1983, is not so long as to make a single scheme unlikely. Finally, California was the location of almost all of the transactions. See Mastelotto, 717 F.2d at 1245 (factors for finding a unitary fraudulent scheme).

The judge gave the following instruction:

The indictment in this case alleges a number of false and fraudulent pretenses, representations and promises. It is not essential that the government prove each and every false pretense, representation, promise, or act alleged in order to find the defendant guilty of a violation of the mail fraud statute. Rather, the government must prove beyond a reasonable doubt that one or more or a sufficient number of the false and fraudulent promises, representations, acts and pretenses alleged in the indictment were made to establish the existence of the scheme to defraud charged in the indictment.

(Emphasis added). The judge repeatedly referred to "the" single scheme, rather than using ambiguous language such as "some" or "any" scheme. He also reminded the jury: "Keep in mind you must unanimously agree on the verdict. That is, the verdict on each count must be unanimous," and "Your verdict, whether it be guilty or not guilty, must be unanimous."

This court has reversed convictions where jury instructions not only failed to require unanimity but also stated that it was permissible to find the defendant guilty if the mailings were in furtherance of some scheme to defraud (Mastelotto ); where the jury indicated...

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