U.S. v. Mucciante

• Decision Date: 15 April 1994
• Docket Number: D,No. 1039,1039
• Parties: UNITED STATES of America, Appellee, v. Timothy M. MUCCIANTE, Defendant-Appellant. ocket 93-1155.
• Court: U.S. Court of Appeals — Second Circuit

Page 1228

21 F.3d 1228

UNITED STATES of America, Appellee, v. Timothy M. MUCCIANTE, Defendant-Appellant.

No. 1039, Docket 93-1155.

United States Court of Appeals Second Circuit.

Argued Feb. 10, 1994.

Decided April 15, 1994.

Leonard J. Levenson, New York City, for defendant-appellant.

Nancy Northup, Asst. U.S. Atty., S.D.N.Y. (Mary Jo White, U.S. Atty., S.D.N.Y., Paul G. Gardephe, Asst. U.S. Atty., S.D.N.Y. of counsel), for appellee.

Before: LUMBARD, MINER and McLAUGHLIN, Circuit Judges.

McLAUGHLIN, Circuit Judge:

Timothy M. Mucciante, a Detroit lawyer, concocted two fanciful investment fraud schemes in the late 1980s. His first scam was relatively modest: he created counterfeit Australian government bonds using his personal computer, and then passed them off as legitimate. His second swindle was picaresque: Mucciante solicited investments for a phantom business venture to barter millions of British condoms in exchange for Russian chickens. He claimed that the chickens could then be sold to Saudi Arabia, yielding a substantial profit for the investors. After his frauds came to light, Mucciante was arrested and charged with a host of federal crimes.

Following a seven-week trial in the United States District Court for the Southern District of New York before then-District Judge Pierre N. Leval, the jury convicted Mucciante on four counts of passing counterfeit foreign government bonds, in violation of 18 U.S.C. Secs. 479 and 2, eight counts of wire fraud, in violation of 18 U.S.C. Secs. 1343 and 2, and two counts of transporting the proceeds of fraud in interstate commerce, in violation of 18 U.S.C. Secs. 2314 and 2. Judge Leval sentenced Mucciante to seventy-one months' imprisonment, to be followed by a three-year term of supervised release, $973,538 in restitution, a $50,000 fine, and a mandatory $750 special assessment.

On appeal, Mucciante's central argument is that Judge Leval's supplemental jury instructions constructively amended his indictment. Mucciante maintains that his indictment was drawn narrowly, and restricted the government to proving his culpability as a principal in the fraud; he argues that Judge Leval's jury charge impermissibly broadened the basis for conviction by allowing the jury to convict him as an aider and abettor in the fraud. Alternatively, Mucciante contends that the government's presentation of evidence constituted a prejudicial variance. Finally, Mucciante challenges his sentence, arguing that Judge Leval's calculation of "loss" under U.S.S.G. Sec. 2F1.1 was clearly erroneous.

We conclude that there was neither a constructive amendment to the indictment nor a prejudicial variance between the indictment and the proof at trial. We also conclude that the calculation of the loss was proper. Accordingly, we affirm.

BACKGROUND

In the late 1980s, Timothy Mucciante was a young lawyer associated with a Detroit, Michigan law firm. Among Mucciante's clients was the celebrated Dr. Stuart M. Berger, a New York diet doctor, radio talk-show host, New York Post columnist and best-selling author of nutrition books. Mucciante counseled Berger on a variety of business ventures to develop and market vitamins and nutritional products. Mucciante acted not only as Berger's lawyer, but also as his promoter and trusted business adviser. In exchange for his services, Mucciante received a percentage of Berger's profits. To facilitate their business dealings, Berger gave Mucciante access and signature authority to some of Berger's bank and brokerage accounts.

A. The Australian Bond Scheme

In 1989, Mucciante advised Berger to invest in Australian government bonds, falsely representing that these bonds yielded 17.9 percent interest, were tax-free and offered pre-paid interest. On Mucciante's advice, Berger instructed his New York City broker, Gruntal & Co. ("Gruntal"), to send Mucciante a check for $1.6 million to purchase a bond. Mucciante deposited the check into one of Berger's bank accounts over which Mucciante had signature authority. In fact, Mucciante never bought the bond. When Berger asked Mucciante for his promised pre-paid interest, Mucciante simply withdrew $143,200 from Berger's own $1.6 million and delivered the cash to Berger.

After receiving his "interest" payment, Berger returned $50,000 of it to Mucciante with instructions to buy another Australian bond. Mucciante falsely told Berger that he combined that $50,000 with another $10,000 of Berger's money to purchase a $60,000 Australian bond. In February 1990, Berger instructed Gruntal to wire $1 million into one of Berger's brokerage accounts (again, an account controlled by Mucciante) so that Mucciante could buy him a third bond. And again, Mucciante falsely told Berger that he bought the bond. Mucciante also falsely told Berger that he bought him a fourth bond using $600,000 in profits from an unrelated business venture.

Ultimately, Berger pressed Mucciante to deliver the actual bonds to him for deposit into Berger's brokerage account at Gruntal. After some stalling, Mucciante responded with characteristic creativity to what was obviously an impossible request. He manufactured counterfeit Australian bonds on his personal computer; for authenticity, he added ribbons and wax. Mucciante delivered the bogus bonds to Berger, who deposited them with Gruntal.

B. The Condom Scheme

Around the same time, Berger appointed Mucciante general counsel for the Areba Casriel Institute ("ACI"), a drug and alcohol rehabilitation center in New York City. ACI was owned by Berger, Alan R. Horowitz and Steven J. Yohay (collectively, the "Investors"). Mucciante proposed to the Investors that they capitalize on ACI's reputation in health care by selling AIDS-related medical products--such as condoms and latex gloves--to the Soviet Union.

Mucciante told the Investors that the Soviets lacked "hard" currency, but were willing to barter chickens in exchange for the condoms and gloves. The chickens, he explained, could then be sold to Saudi Arabia. He predicted that the deal would yield a profit of around $3 million. Mucciante somehow convinced the Investors to entrust him with a total of $75,000, ostensibly as a down payment to the London Rubber Company for two million condoms and two million latex gloves. In fact, Mucciante deposited the Investors' money into his personal brokerage account and never placed the order.

The Investors soon began clamoring to see some return on their investment. Mucciante responded that they would each receive as much as $600,000--as soon as the Saudis released the chickens from quarantine. When pressed, Mucciante sent each investor $25,000, which Mucciante characterized as an initial return on their investment. In fact, Mucciante paid the Investors with money from one of Berger's bank accounts.

In March 1990, both the condom scheme and the Australian bond scheme fell apart when a broker at Gruntal discovered that the bonds Berger had deposited were fake.

C. The Indictment

In 1991, a federal grand jury returned a 23-count indictment charging Mucciante with the two fraud schemes. Because the particulars of Mucciante's indictment are the focus of this appeal, we describe the indictment in some detail.

The first nine counts of Mucciante's indictment related to the Australian bond scheme. Counts 1 through 3 charged Mucciante with committing wire fraud, in violation 18 U.S.C. Secs. 1343 and 2; counts 4 and 5 charged him with transporting the proceeds of the bond fraud in interstate commerce, in violation of 18 U.S.C. Secs. 2314 and 2; and counts 6 through 9 charged the passing of counterfeit foreign government bonds, in violation of 18 U.S.C. Secs. 479 and 2.

The next three counts of the indictment accused Mucciante of illegally covering up his frauds. Specifically, counts 10 and 11 charged him with obstructing justice, in violation of 18 U.S.C. Secs. 1503 and 2; and count 12 charged him with witness tampering, in violation of 18 U.S.C. Sec. 1512.

The last eleven counts of the indictment covered the condom scheme. Counts 13 through 21 charged Mucciante with committing wire fraud, in violation of 18 U.S.C. Secs. 1343 and 2; and counts 22 and 23 charged him with transporting the proceeds of the condom fraud in interstate commerce, in violation of 18 U.S.C. Secs. 2314 and 2. Significantly, all the counts of Mucciante's indictment, except the witness tampering count, charged him with violating 18 U.S.C. Sec. 2, the federal aiding and abetting statute.

D. The Trial

At trial, the government basically argued that Mucciante defrauded Berger in the Australian bond scheme, and defrauded Berger, Horowitz and Yohay in the condom scheme. Mucciante's defense was that Berger himself was the con artist, and that Mucciante, at most, assisted the "domineering" Berger. Regarding the Australian bond scheme, for example, defense counsel argued in summation that Mucciante did not defraud Berger; rather, Mucciante and Berger defrauded Berger's broker, Gruntal, with the fake bonds.

Apparently, Mucciante's defense struck a sympathetic chord with some members of the jury. During the eight days of deliberations, the jury sent out several notes suggesting that it suspected Berger of complicity in the frauds. For example, one note posed the following hypothetical:

If A is charged with a criminal offense against B, but B is suspected of complicity in the offense, can A be found guilty?

Judge Leval answered that it would depend on which crimes they are considering. For the wire fraud and interstate transfer counts relating to the Australian bond scheme (counts 1-5), he explained that the government must prove that Mucciante defrauded someone; and, because the indictment specified Berger as the victim of that wire fraud, the government had to prove that Mucciante defrauded Berger. Accordingly, Judge Leval charged that if the jury believed that Berger and Mucciante were partners in the Australian bond scheme, then it could not convict on counts...