U.S. v. Helms, 88-1232

• Citation: 897 F.2d 1293
• Decision Date: 26 March 1990
• Docket Number: No. 88-1232,88-1232
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Carl Ray HELMS, Dennis Harris, Charles E. Vandervort, Shirley Harris and Paul Earl Briggs, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1293

897 F.2d 1293

UNITED STATES of America, Plaintiff-Appellee, v. Carl Ray HELMS, Dennis Harris, Charles E. Vandervort, Shirley Harris and Paul Earl Briggs, Defendants-Appellants.

No. 88-1232.

United States Court of Appeals, Fifth Circuit.

March 26, 1990.

David C. Schick, Dallas, Tex. (court-appointed), for Carl R. Helms.

Carl R. Helms, La Tuna Tex., pro se.

Steve Sumner, Dallas, Tex. (court-appointed), for Dennis Harris.

Dennis Harris, Piedmont, Okl., pro se.

James A. Clark (argued), Ardmore, Okl., Samuel T. Foutz, Dallas, Tex. (court-appointed), for Vandervort.

Michael P. Gibson, Burleson, Pate & Gibson, Dallas, Tex., for Shirley Harris.

Vincent W. Perini, Dallas, Tex. (court-appointed), for Paul Briggs.

John D. Nation (argued), Dallas, Tex., for Helms, D. Harris & S. Harris.

William Brown, Washington, D.C., Marvin Collins, U.S. Atty., Dallas, Tex., Mervyn Hamburg, U.S. Dept. of Justice, Appellate Div., Crim. Div., Washington, D.C., for plaintiff-appellee.

Appeals from the United States District Court for the Northern District of Texas.

Before WISDOM, JOHNSON, and DUHE, Circuit Judges.

JOHNSON, Circuit Judge:

The five appellants, Carl Helms ("Helms"), Dennis Harris, Shirley Harris, Paul Briggs ("Briggs"), and Charles Vandervort ("Vandervort"), were charged in a forty-two count indictment. Helms, Dennis Harris and Shirley Harris were convicted on the forty-one counts which were submitted to the jury. Briggs and Vandervort were convicted on some, but not all of the counts charged. Appellants raise numerous arguments on appeal. This Court affirms.

I. FACTS AND PROCEDURAL HISTORY

The superseding indictment filed on August 11, 1987, charged the appellants with conspiracy to commit wire fraud and mail fraud in violation of 18 U.S.C. Sec. 371. The indictment also charged twenty-eight substantive counts of mail fraud, in violation of 18 U.S.C. Sec. 1341, and thirteen substantive counts of wire fraud, in violation of 18 U.S.C. Sec. 1343. ¹ The indictment also named Fred Ellis ("Ellis"), Carl Dunn ("Dunn"), Ron Perry ("Perry"), Larry Stout ("Stout"), and William Pike ("Pike"). ²

Appellants Helms, Dennis Harris and Shirley Harris were each charged and convicted on all forty-one counts. Helms was sentenced to consecutive terms of five years' imprisonment on fifteen counts for a total of seventy-five years. Dennis and Shirley Harris were each sentenced to consecutive terms of five years imprisonment on twelve counts for a total of sixty years each. Briggs was convicted on the conspiracy count and on thirty of the thirty-two substantive counts with which he was charged. Vandervort was charged only in the first thirty counts of the indictment. Vandervort was acquitted on the conspiracy count, and convicted on thirteen substantive counts. Briggs and Vandervort were each sentenced to consecutive terms of five years' imprisonment on five counts for a total of twenty-five years each.

This Court must view the facts of this case in the light most favorable to the Government. Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1942). The evidence presented related principally to four enterprises: National Chem Tech Chemical Company ("NCTC"), Raphael, Inc. ("Raphael"), Max, Inc. ("Max"), and Movies, Inc. ("Movies"). These enterprises sold "distributorships" for various products. The distributorships were sold at a cost of up to $9,900.00 each, to investors around the country.

NCTC began operations in 1984 and sold distributorships for commercial cleaning chemicals. NCTC closed in March of 1985. Raphael began selling distributorships for women's cosmetics shortly after NCTC closed. Raphael continued selling distributorships until June 1986 even though the company had stopped purchasing cosmetics in January 1986. In March 1986, Max was formed and sold distributorships for men's cosmetics. Movies, a part of Max, was set up to sell distributorships for video cassettes. Both Max and Movies ceased operations in December 1986.

Helms, Dennis Harris and Shirley Harris originated or were involved in the management of all of these enterprises. Vandervort was the President of Raphael. Briggs was a salesman with NCTC, vice-president of Raphael, and President of Max.

Several investors testified at trial as to their individual experiences with the four companies. Their testimony at trial illustrates that the distributorships of each of these companies were sold by way of similar methods. An advertisement was placed to attract potential investors. People who responded to the advertisement were then contacted by a salesperson of the particular company. The salesperson would then attempt to sell the interested person a distributorship by stating, for example, that if the investor was not satisfied, he or she could get a full refund, that the particular company had been in business for several years, and that other distributors were doing very well. The investors would then mail in all or part of the price of the distributorship. Usually, the investor received a congratulatory letter, notifying him that he had been approved for a distributorship. The investor would then send in the balance of the investment. Some investors received a shipment of inventory, but were then not instructed as to whom they were to distribute the goods. Other investors simply received nothing but apologies from the particular company for delays in shipment. Later, the investors would discover that the company from whom they had purchased a distributorship had been shut down, and the investors were unable to obtain a refund.

Each of the appellants raise several issues on appeal. These will be discussed in turn.

II. DISCUSSION ³

A. Sufficiency of the Evidence

To support a conviction for mail fraud, the mailing involved must be "for the purpose of executing the scheme." United States v. Toney, 605 F.2d 200, 206 (5th Cir.), cert. denied, 444 U.S. 1090, 100 S.Ct. 1055, 62 L.Ed.2d 779 (1980) (citations omitted). Appellants Helms, Dennis Harris, Shirley Harris, and Briggs argue that the letters and mailgrams which form the basis of thirteen substantive counts, do not support convictions for mail fraud. These four appellants contend that since the mailings referred to in those thirteen counts were sent to the investors after the distributorship fee had been paid, the mailings were not sent in furtherance of the scheme. These appellants argue that the scheme had been completed once the distributorship fee had been paid. They also argue that the mailings were merely tangential to the underlying scheme, and therefore cannot support convictions of mail fraud.

The mailings and mailgrams referred to in the challenged counts, ⁴ with one exception, were notifications of acceptance or acknowledgements of payment received. ⁵ These mailings and mailgrams contained various statements, such as "your inventory will arrive shortly," and that the distributor would be contacted in the "near future" regarding product delivery. The fact that these letters were sent after distributorship fees had been paid does not necessarily mean that these letters were not sent in furtherance of the scheme to defraud. United States v. Sampson, 371 U.S. 75, 83 S.Ct. 173, 9 L.Ed.2d 136 (1962), involved the mailing of acceptance letters. In Sampson, the Supreme Court held that where the mails were used to lull victims by assuring them that the promised services would be performed, the mailings were for the purpose of executing the scheme. This Court has stated that "post-purchase mailings which are designed to lull the victim into a false sense of security, postpone inquiries or complaints, or make the transaction less suspect are mailings in furtherance of the scheme." 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). Similarly, in the present case, the mailings and mailgrams were used to lull the holders of distributorships into believing that they had invested in a company which would fulfill the promises and representations previously made. The mailings and mailgrams were not simply tangential to the scheme.

Appellant Vandervort also raises a sufficiency of the evidence claim. Vandervort argues that the district court erred in denying him an acquittal because, Vandervort claims, the evidence was insufficient to support a conviction against him. Vandervort contends that a reasonably minded juror would have had a reasonable doubt as to Vandervort's role in this case. Vandervort bases this argument on the fact that he was acquitted on the conspiracy count, but convicted on thirteen substantive counts; he argues that this verdict was inconsistent. Initially, we state that a jury verdict need not necessarily be consistent. United States v. Duvall, 846 F.2d 966 (5th Cir.1988). Furthermore, sufficient evidence was presented to support Vandervort's conviction. Vandervort was the President of Raphael. He had power over distribution of the bank accounts which held the fees obtained from investors. Vandervort was the "approval committee" which selected distributors for Raphael.

In April 1986, Vandervort sent the following letter to Raphael distributors:

... [D]ue to an unexpected amount of reorders from our distributors now in full operation we have surpassed the capability of our factory resources for a short period of time. We're now making arrangements with our factories to make and increase in output, an we should have an increase in flow of products in our facility in Dallas in the next twenty-one days.

Trial Transcript p. 1624. The last order placed by Raphael had been placed in January 1986. The company had no money to purchase more cosmetics. The company ceased operations at the end of June 1986. When distributors called to complain that they had not received their inventory, Vandervort told staff members to advise the distributors of false delivery dates, when the company had nothing to...