U.S. v. Funt

• Decision Date: 22 March 1990
• Docket Number: No. 87-5849,87-5849
• Citation: 896 F.2d 1288
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Ronald M. FUNT, Randy Webman, Thomas John Harvey, Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1288

896 F.2d 1288

UNITED STATES of America, Plaintiff-Appellee, v. Ronald M. FUNT, Randy Webman, Thomas John Harvey Defendants-Appellants.

No. 87-5849.

United States Court of Appeals Eleventh Circuit.

March 22, 1990.

As Amended May 15, 1990.

Laura H. Sayet, Miami, Fla., for Ronald M. Funt.

Christopher A. Grillo, Ft. Lauderdale, Fla., court appointed, for Thomas John Harvey.

Alvin E. Entin, Miami, Fla., for Randy Webman.

Dexter Lehtinen, U.S. Atty. and Norman A. Moscowitz, Asst. U.S. Atty., Miami, Fla., for the U.S.

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

Before FAY and KRAVITCH, Circuit Judges, and CASTAGNA ^*, District Judge.

KRAVITCH, Circuit Judge:

A fraudulent coin sales scheme formed the underlying basis for convictions on various counts of mail and wire fraud, interstate transportation of stolen property, and

conspiracy in violation of 18 U.S.C. Secs. 1341, 1343, 2314, and 371, respectively. On appeal defendants raise multiple claims of error. Webman, the architect of the scheme, Harvey, his able assistant, and Funt, (unfortunately for him) their faithful employee, argue that the evidence was not sufficient to support their convictions, that the district court abused its discretion in evidentiary rulings, and that the district court erred, when imposing sentence, in its finding as to the amount involved in the fraudulent scheme. Webman alone raises an ineffective assistance of counsel claim, and Funt alleges error in the district court's denial of his motion for severance. Concluding that these contentions do not merit reversal, we affirm.

THE FACTS

Randy Webman, the prime mover behind the fraudulent scheme, previously had run coin operations that had gone "out-of-business" still owing customers money. In mid-1980, he and Thomas Harvey opened a new business, Intercontinental Coin Exchange (ICE), with a lone office in North Miami Beach, and Funt began work there in late 1980. To convince customers of ICE's reliability, the defendants falsely assured potential buyers that ICE had been in business for almost four years. ICE purported to sell investment grade Morgan silver dollars, and in fact initially many customers received the quantity and quality of coins they ordered, but soon ICE started to fall behind in filling its orders, a fact it concealed from its new customers despite promising optimistic delivery schedules. Not only were the coins late in arriving, but ICE began sending out lower grade silver dollars, a particularly deceitful practice as the difference in coin quality was not discernible by the naked eye but required expert appraisal. ICE created a "market" for silver dollars, and issued ever-increasing weekly quotes of the "market" value of the coins, at which ICE was willing to sell more coins or repurchase coins from those who had previously bought. This "market" price was concocted by Webman, and bore no relationship to any actual market pressures. ICE eventually stopped filling its new orders, although it continued to accept payment for future deliveries of coins. ICE accepted coin returns, and assured customers that the repurchase payments would be forthcoming. For a time ICE attempted to live up to the grandiosity of its "intercontinental" appellation by opening short-lived franchises, including one in Palm Beach. Those ventures closed, but ICE continued dealing with the franchise customers.

As cash flow pressures increased, ICE offered a new investment to those victims to whom ICE owed money: they could purchase $5,000 shares in Continental Fiscal, Inc. (CFI) by rolling over the money due them. In addition, ICE marketed shares in CFI to new customers. Funt, as the government concedes, knew nothing of the over-grading of the coins, but unfortunately he went along with ICE's other fraudulent representations and continued to lull customers even after it had become clear that money being received was spent on luxuries for Webman and Harvey although no coins were being sent out for the benefit of the customers. Eventually this conduct caught up to them, and no later than May 1982, ICE shut its doors, disconnected its phone, and disappeared.

At trial Webman was convicted on all 24 counts that went to the jury, including mail fraud, wire fraud, conspiracy, and interstate transportation of stolen property (ITSP); Harvey was acquitted on two of those counts, one each of mail fraud and ITSP. Funt, who was only charged in six counts, was found guilty on two counts of mail fraud and one count of wire fraud, but was acquitted on two mail fraud counts and conspiracy.

DISCUSSION

I. SUFFICIENCY OF THE EVIDENCE

In reviewing a challenge to the sufficiency of the evidence this court must take the evidence in the light most favorable to the government. Hamling v. United States, 418 U.S. 87, 94 S.Ct. 2887, 2911, 41 L.Ed.2d 590 (1974). Credibility choices and the weighing of evidence must be resolved The government must prove "three elements to establish a violation of 18 U.S.C. Sec. 1341: (1) The accused participated in a scheme or artifice to defraud; (2) The defendant 'caused' a use of the mails; (3) The mailing was for the purpose of executing the scheme." United States v. Hewes, 729 F.2d 1302, 1320 (11th Cir.1984), cert. denied, sub nom Caldwell v. United States, 469 U.S. 1110, 105 S.Ct. 790, 83 L.Ed.2d 783 (1985); see also Sawyer, 799 F.2d at 1501-02. It is well established that "lulling" letters may constitute execution of the scheme. United States v. Sampson, 371 U.S. 75, 83 S.Ct. 173, 9 L.Ed.2d 136 (1962); Hewes, 729 F.2d at 1353; United States v. Toney, 598 F.2d 1349 (5th Cir.1979), cert. denied, 444 U.S. 1033, 100 S.Ct. 706, 62 L.Ed.2d 670 (1980) ¹; United States v. Ashdown, 509 F.2d 793, 800 (5th Cir.), cert. denied, 423 U.S. 829, 96 S.Ct. 48, 46 L.Ed.2d 47 (1975). The rule of this circuit, analogous to conspiracy law, is that "so long as one participant in a fraudulent scheme causes a use of the mails in execution of the fraud, all other knowing participants in the scheme are legally liable for that use of the mails." Toney, 598 F.2d at 1355. Moreover, the use of the mails need not have been foreseeable to the convicted schemer. Id. at 1355 n. 10.

                in favor of the jury's verdict.  Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942).  In short, so long as a reasonable juror could conclude that the evidence, viewed with all reasonable inferences drawn in favor of the government, established the defendant's guilt beyond a reasonable doubt, then the conviction will withstand a sufficiency challenge.  It is not necessary, however, that every hypothesis of innocence be disproven as the jury "is free to choose among reasonable constructions of the evidence."    United States v. Vera, 701 F.2d 1349, 1357 (11th Cir.1983) (quoting United States v. Bell, 678 F.2d 547, 549 (5th Cir., Unit B 1982) (en banc) (discussing history of sufficiency of the evidence standard in the Fifth Circuit), aff'd., 462 U.S. 356, 103 S.Ct. 2398, 76 L.Ed.2d 638 (1983));  see also United States v. Sawyer, 799 F.2d 1494, 1501 (11th Cir.1986), cert. denied, 479 U.S. 1069, 107 S.Ct. 961, 93 L.Ed.2d 1009 (1987).  In cases of fraud, "[i]t is often difficult to prove fraudulent intent by direct evidence, and it must be inferred from a pattern of conduct or a series of acts 'rather aptly designated as badges of fraud.' "   United States v. Amrep, Corp., 560 F.2d 539, 546 (2nd Cir.1977) (citations omitted), cert. denied, 434 U.S. 1015, 98 S.Ct. 731, 54 L.Ed.2d 759 (1978)
                

The elements of wire fraud under section 1343 are analogous: "scheme, use of interstate communications, such as a telephone, and criminal intent to defraud." United States v. Cowart, 595 F.2d 1023, 1031 n. 10 (5th Cir.1979).

A. Funt: Sufficiency of the Evidence

Funt alleges that the evidence was insufficient to convict him of mail and wire fraud. Having reviewed the evidence in the light most favorable to the government, we conclude that a reasonable juror could have found Funt guilty beyond a reasonable doubt.

1. The Howard Transaction

Funt was convicted on Count One of receiving a letter for the purpose of executing the scheme to defraud. The letter from Allan Howard contained a check in payment for coins that Howard never received. Funt contends that his only connection with Howard was a lulling letter Funt sent to Howard and one telephone conversation, both subsequent to the receipt of Howard's check. Funt contends that he had no connection with the receipt of the check or the solicitation of it, and therefore cannot be convicted under mail fraud.

a) Effect of the Jury Acquittal on Conspiracy

Funt argues that because he was acquitted of the conspiracy, the jury must

not have believed he was part of the scheme, and therefore he should not be held liable for actions of his co-schemers of which he had no knowledge and with which he had no involvement. Acquittal on the conspiracy count, however, does not mean that the jury necessarily rejected the government's proof of Funt's involvement in the scheme. To the contrary, the jury's guilty verdict on the mail fraud count belies Funt's assertion. Inconsistent jury verdicts are not necessarily cause for reversal. United States v. Powell, 469 U.S. 57, 105 S.Ct. 471, 477, 83 L.Ed.2d 461 (1984) (acquittal may reflect exercise of lenity). Moreover, the fraudulent scheme and the conspiracy were not coterminous, and the jury consistently could have acquitted on conspiracy while convicting on mail and wire fraud as the elements of the two offenses differ. In fact, the conspiracy inter alia alleged interstate transportation of stolen property, whereas Funt was not convicted on that substantive count. The ITSP could have been what the jury found lacking to convict Funt of conspiracy. The conspiracy acquittal is not contrary to a guilty verdict on mail fraud.

b) Elements of the Offense

The Howard letter was in furtherance of the...