U.S. v. Hawkey, 97-3248

• Citation: 148 F.3d 920
• Decision Date: 24 June 1998
• Docket Number: No. 97-3248,97-3248
• Parties: -5058 UNITED STATES of America, Appellee, v. Lester A. HAWKEY, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 920

148 F.3d 920

82 A.F.T.R.2d 98-5058

UNITED STATES of America, Appellee, v. Lester A. HAWKEY, Appellant.

No. 97-3248.

United States Court of Appeals,

Eighth Circuit.

Argued March 10, 1998.

Decided June 24, 1998.

Thomas K. Wilka, Sioux Falls, SD, argued, for Appellant.

Ted L. McBride, Asst. U.S. Atty., Rapid City, SD, argued (Gregg S. Peterman, Asst. U.S. Atty., Rapid City, SD, on the brief), for Appellee.

Before BEAM and HEANEY, Circuit Judges, and WATERS, ¹ District Judge.

HEANEY, Circuit Judge.

Lester A. Hawkey, a sheriff in Minnehaha County, South Dakota, was charged in a forty-one count indictment for misusing funds belonging to the Minnehaha Sheriff's Department (MSD) and the Minnehaha County Sheriff and Deputies Association (MCSDA). ² A jury convicted Hawkey on all but two counts. ³ On July 21, 1997, the district court sentenced Hawkey to forty-one months of imprisonment. ⁴ On appeal, Hawkey challenges the sufficiency of the evidence supporting his convictions, the district court's implementation of the United States Sentencing Guidelines (Sentencing Guidelines) and certain forfeitures. After a careful review of the record, we affirm as to the sufficiency of the evidence and the district court's implementation of the Sentencing Guidelines. With respect to the forfeiture issue, however, we reverse and remand.

I. Background

In 1988, Hawkey, on behalf of the MSD and the MCSDA, entered into an agreement with Wildwood Productions, a benefit concert promoter, ⁵ to conduct annual benefit concerts each April. The proceeds of the annual concerts were purportedly intended to aid local youth programs. Prompted by Hawkey's representations, Wildwood's telemarketers solicited money from individuals and businesses in South Dakota and neighboring states for the purchase of tickets, donations, and/or to purchase advertising space in the concert program book. By United States mail, Wildwood sent statements or invoices to individuals and businesses who agreed to purchase tickets, advertise, or make donations. Individuals and businesses also sent their checks to either the MSD or MCSDA via the United States mail.

Wildwood's contracts with the MSD and MCSDA called for the establishment of two bank accounts. One account was to hold proceeds of ticket sales and the other was to hold the proceeds of advertisement sales. Shortly after the 1991 concert, Hawkey began using the concert accounts for a variety of personal and business expenses. While making some contributions to youth programs and charities, Hawkey spent a significant portion of the benefit concert proceeds for personal items. Hawkey also made deposits of business and personal funds to the concert account to replace depleted funds.

II. Sufficiency of the Evidence

Hawkey challenges the sufficiency of the evidence used to support his conviction on all counts. In reviewing the sufficiency of the evidence supporting a criminal conviction, "we look at the evidence in the light most favorable to the verdict and accept as established all reasonable inferences supporting the verdict." United States v. Black Cloud, 101 F.3d 1258, 1263 (8th Cir.1996). We reverse the conviction only if no reasonable jury could have found Hawkey guilty beyond a reasonable doubt. See United States v. Blumeyer, 114 F.3d 758, 765 (8th Cir.1997) (citation omitted). The evidence supporting Hawkey's criminal conviction "need not exclude every reasonable hypothesis of innocence, but simply be sufficient to convince the jury beyond a reasonable doubt that the defendant is guilty." United States v. McGuire, 45 F.3d 1177, 1186 (8th Cir.1995) (citation omitted). We can neither weigh the evidence nor assess the credibility of the witnesses. See Burks v. United States, 437 U.S. 1, 16-17, 98 S.Ct. 2141, 57 L.Ed.2d 1 (1978). "This standard is a strict one, and a jury verdict should not be overturned lightly." United States v. Sykes, 977 F.2d 1242, 1247 (8th Cir.1992) (citation omitted). Applying this standard to the record before us we conclude that ample evidence supports Hawkey's conviction on each count.

A. Mail Fraud

In Hawkey's challenge to the sufficiency of the evidence used to support his twenty-four count conviction for mail fraud, he argues that no one suffered any property loss and that there was no scheme or intent to defraud. Title 18 U.S.C. § 1341 prohibits the use of the mails to execute "any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises." 18 U.S.C. § 1341. Accordingly, to obtain a conviction for mail fraud under § 1341, the government must prove "(1) the existence of a scheme to defraud, and (2) the use of the mails ... for purposes of executing the scheme." United States v. Manzer, 69 F.3d 222, 226 (8th Cir.1995). The scheme "need not be fraudulent on its face but must involve some sort of fraudulent misrepresentations or omissions reasonably calculated to deceive persons of ordinary prudence and comprehension." United States v. Coyle, 63 F.3d 1239, 1243 (3d Cir.1995) (citation and internal quotation marks omitted). The term "property" extends to intangible property rights. United States v. Shyres, 898 F.2d 647, 651 (8th Cir.1990). ⁶

Hawkey argues that, because the businesses received their advertisements and ticket purchasers were able to attend the concerts, they were not deprived of money or property because they received what they paid for. We disagree. The record reveals that Hawkey solicited, or caused to be solicited, funds that were intended for charitable organizations; and, while some money was in fact paid to the charitable organizations, Hawkey converted most of the money for his own personal use. The businesses and concert-goers who responded to Hawkey's solicitations did not intend to merely purchase a ticket or advertising; they intended part of their payment as a contribution to a charitable organization.

Hawkey alternatively argues that there is insufficient evidence of a scheme to defraud because he did not control the telemarketer's solicitations, and the telemarketers did not represent to consumers that all of the concert proceeds would go to charity. Likewise, this argument is unavailing. A reasonable jury could have found that Hawkey intentionally engaged in a scheme by which money intended and solicited for charitable purposes was diverted from its designated charitable purpose to his personal benefit through false representations. The record reflects that the concerts were designed to raise money for charitable purposes; Hawkey knowingly diverted these funds for his personal benefit; and Hawkey failed to inform Wildwood, his accountant, the contributors, and the benefactors that he removed the funds for his personal benefit. Consequently, the jury permissibly concluded that there was a scheme in which Hawkey knowingly participated.

Hawkey contends that there was insufficient evidence to prove that he intended to defraud citizens responding to his solicitations. The jury was instructed that "to act with intent to defraud means to act knowingly and with the intent to deceive someone for the purpose of causing some financial loss ... to another or bringing about some financial gain to oneself or another to the detriment of a third party." The jury found that Hawkey possessed the required intent to obtain personal gain from his misrepresentations and found him guilty of mail fraud. We conclude that this finding is supported by the record.

B. Unlawful Monetary Transactions

Hawkey challenges the sufficiency of evidence supporting his conviction on eight counts of unlawful monetary transactions under 18 U.S.C. § 1957. Section 1957 "prohibits anyone from knowingly engaging 'in a monetary transaction in criminally derived property that is of a value greater than $10,000 and is derived from specified unlawful activity.' " United States v. Hare, 49 F.3d 447, 451 (8th Cir.1995) (quoting 18 U.S.C. § 1957(a)). We believe that Hare correctly states the law and note that, in order to obtain a conviction under § 1957, the government is not required to prove that Hawkey "knew that the offense from which the criminally derived property was derived was specified unlawful activity." 18 U.S.C. § 1957(c). Section 1956(c)(7)(A) defines "specified unlawful activity" for the purposes of § 1957 as an offense listed in 18 U.S.C. § 1961(1), which includes mail fraud. 18 U.S.C. § 1956(c)(7)(A). See 18 U.S.C. § 1961(1)(B). See also § 1957(f)(3) (adopting the definition of "specified unlawful activity" provided in § 1956). After a careful review of the record and in light of our discussion of Hawkey's mail fraud conviction, we conclude that a reasonable jury could have found that Hawkey knowingly engaged in a monetary transaction in criminally derived property that was of a value greater than $10,000 and was derived from specified unlawful activity.

C. Misappropriating Local Government Property

Hawkey challenges three counts of misappropriating local government property in violation of 18 U.S.C. §§ 2 ⁷ and 666. To obtain a conviction under § 666, the government must prove that Hawkey (1) was an agent of Minnehaha County at the time of the offense; (2) embezzled, stole, obtained by fraud, willingly converted, or intentionally misapplied Minnehaha County property worth at least $5,000; and (3) the offense occurred during the time in which Minnehaha County received in excess of $10,000 in any one year from a qualified federal program. See United States v. Valentine, 63 F.3d 459, 462 (6th Cir.1995).

As sheriff, Hawkey was an agent of Minnehaha County. The record indicates that since October 1977, Hawkey owned and operated a for-profit inmate food service business. ⁸ During 1991 and 1992, Hawkey purchased federal surplus food with checks drawn on the benefit concert accounts and sold it to the Minnehaha County Jail for his personal profit. In January and September 1992, Hawkey...