U.S. v. Pierce

• Decision Date: 26 May 2005
• Docket Number: No. 03-4956.,03-4956.
• Citation: 409 F.3d 228
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Larry J. PIERCE, II, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 228

409 F.3d 228

UNITED STATES of America, Plaintiff-Appellee, v. Larry J. PIERCE, II, Defendant-Appellant.

No. 03-4956.

United States Court of Appeals, Fourth Circuit.

Argued December 3, 2004.

Decided May 26, 2005.

COPYRIGHT MATERIAL OMITTED

ARGUED:

Nancy Combs Dickenson, Lebanon, Virginia, for Appellant. Rick A. Mountcastle, Assistant United States Attorney, Office of the United States Attorney, Abingdon, Virginia, for Appellee.

ON BRIEF:

John L. Brownlee, United States Attorney, Roanoke, Virginia, for Appellee.

Before MOTZ, GREGORY, and SHEDD, Circuit Judges.

Affirmed in part, vacated in part, and remanded by published opinion. Judge SHEDD wrote the opinion, in which Judge MOTZ joined. Judge GREGORY wrote an opinion concurring in part and dissenting in part.

SHEDD, Circuit Judge.

Defendant Larry J. ("Jimmy") Pierce, II was convicted of ten counts of mail fraud and one count of conspiracy to commit mail fraud in connection with a bingo operation in southwest Virginia. Pierce challenges his conviction solely on the ground that he never caused the United States mails to be used in furtherance of the fraudulent scheme. He challenges his 33-month prison sentence on the grounds that (1) the district court's estimate of the loss resulting from the fraud exceeded the figure stipulated to by the Government in his coconspirators' sentencing proceedings, (2) the evidence at trial did not support the district court's estimate of the loss, and (3) the disparity between his sentence and his coconspirators' sentences violates the Equal Protection Clause. In his petition for rehearing, Pierce argues for the first time that his sentence must be vacated under United States v. Booker, ___ U.S. ___, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005). For the reasons that follow, we affirm Pierce's conviction but vacate the sentence and remand this case for resentencing.

I.

Because Pierce challenges the sufficiency of the evidence supporting his conviction, we view the facts established at trial in the light most favorable to the Government. Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942).

Bristol Regional Speech and Hearing Center, Inc. ("Bristol") is a nonprofit charitable organization located in southwest Virginia. Bristol was authorized by Virginia law to pay outside agents to conduct bingo games to generate funds for its programs. Sue Wright, Bristol's director, testified that there was no authority or mechanism for the individuals who carried out the bingo operation on behalf of Bristol to share in any of the income derived from bingo sales. Bristol was to receive all the proceeds from any bingo game sold during a session.

Wright hired Linda Pierce to manage Bristol's bingo operation. Linda Pierce then hired her son Jimmy and two other relatives, Bill Hoss and Bill Hoss II, to help her operate the bingo events. Bill Hoss called out the numbers, while Jimmy Pierce and Bill Hoss II conducted most of the sales activities. Linda Pierce had general supervisory authority and kept the records for the bingo operation. Wright rarely attended bingo sessions.

As early as 1997, the Hosses and Jimmy Pierce began purchasing extra cases of instant bingo games from Bristol's supplier, Woolwine Specialty Sales ("Woolwine"). Bill Hoss would purchase a number of cases on Bristol's account and then would purchase additional cases for cash. Jimmy Pierce and Bill Hoss II would sell these additional instant games at the same time that they sold Bristol's games. During a typical evening session, they might sell six cases of instant games for Bristol and four or five additional cases for themselves. As they made sales, Jimmy Pierce and Bill Hoss II deposited the cash proceeds into Bristol's cash drawer. At some point during or after the session, they withdrew from the cash drawer $166 for each case of instant games they sold for themselves. Jimmy Pierce and Bill Hoss II would then report to Linda Pierce (for official recordkeeping purposes) only the number of Bristol's games they sold. Using this information, Linda Pierce prepared a report for Bristol's records and mailed that report to Wright. Of course, the report understated the total number of instant games sold during each session.

A grand jury indicted Linda Pierce, Jimmy Pierce, Bill Hoss, and Bill Hoss II on eleven counts of mail fraud and one count of conspiracy to commit mail fraud. Bill Hoss and Bill Hoss II each pled guilty to one count of conspiracy to commit mail fraud. In its plea agreement with Bill Hoss, the Government stipulated that the loss resulting from the conspiracy was more than $70,000 but less than $120,000 and further agreed that Bill Hoss would be considered a minor participant in the conspiracy. In its plea agreement with Bill Hoss II, the Government stipulated that the loss was more than $120,000 but less than $200,000. Pursuant to their plea agreements, the Hosses agreed to testify against Linda Pierce and Jimmy Pierce.

During the trial of Linda Pierce and Jimmy Pierce, the Government produced records showing the number of off-the-books instant bingo games purchased from Woolwine by Jimmy Pierce and the Hosses from June 2001 through February 2002. Although there were no records documenting purchases made before June 2001, Woolwine employee Angela Bowery testified that the number of off-the-books instant games purchased each month by Jimmy Pierce and the Hosses remained roughly the same from 1997 to 2002. Based on this evidence, Virginia Gaming Commission Agent Harrell Erwin calculated the total loss resulting from the fraudulent scheme, going back only to September 1999, to be $265,598.¹

After a three-day trial, the jury acquitted Linda Pierce on all counts of the indictment. The jury convicted Jimmy Pierce of mail fraud and conspiracy to commit mail fraud, and the district court sentenced him to 33 months in prison with three years of supervised release. This appeal followed.

II.

A.

Pierce's conviction must be upheld if "there is substantial evidence, taking the view most favorable to the Government," to support it. Glasser, 315 U.S. at 80, 62 S.Ct. 457. "[S]ubstantial evidence is evidence that a reasonable finder of fact could accept as adequate and sufficient to support a conclusion of a defendant's guilt beyond a reasonable doubt." United States v. Burgos, 94 F.3d 849, 862 (4th Cir.1996) (en banc). In evaluating the sufficiency of the evidence to support a criminal conviction, we assume that the jury resolved all contradictions in the testimony in favor of the Government. United States v. Sun, 278 F.3d 302, 313 (4th Cir.2002).

In order to prove mail fraud, the Government must prove that the defendant (1) knowingly participated in a scheme to defraud and (2) mailed, or caused to be mailed, anything "for the purpose of executing such scheme." 18 U.S.C. § 1341. Both in the district court and on appeal, Pierce has challenged his mail fraud conviction solely on the ground that he never caused the United States mails to be used in furtherance of the fraudulent scheme.

A person "causes" the mails to be used when he "does an act with knowledge that the use of the mails will follow in the ordinary course of business, or where such use can reasonably be foreseen, even though not actually intended." Pereira v. United States, 347 U.S. 1, 8-9, 74 S.Ct. 358, 98 L.Ed. 435 (1954); see also United States v. Edwards, 188 F.3d 230, 235 (4th Cir.1999) (stating that "proof that the use of the mails was, objectively, reasonably foreseeable is sufficient to support a conviction for conspiracy to commit mail fraud"). The evidence established that Linda Pierce mailed falsified reports of bingo game sales to Wright. The evidence also established that Jimmy Pierce provided his mother with information after each session so that she could prepare these reports for Wright. Since Wright was very rarely present onsite during bingo sessions, the jury could conclude — and it is not disputed on appeal — that Jimmy Pierce reasonably foresaw the use of the mails to deliver the daily bingo reports to Wright. Thus, Pierce "caused" the mails to be used.

Pierce contends, however, that the mailing of these daily bingo reports was not in furtherance of the fraudulent scheme because he had already obtained his profits from Bristol's cash drawer before the reports were actually mailed. According to Pierce, he cannot be liable under § 1341 because the mailing at issue was not necessary for his receiving the proceeds of the fraud. This argument is meritless.

Although the statute "does not purport to reach all frauds, but only those limited instances in which the use of the mails is a part of the execution of the fraud," Kann v. United States, 323 U.S. 88, 95, 65 S.Ct. 148, 89 L.Ed. 88 (1944), it is enough that the mailing be "incident to an essential part of the scheme, or a step in the plot," Schmuck v. United States, 489 U.S. 705, 711, 109 S.Ct. 1443, 103 L.Ed.2d 734 (1989) (internal citations and quotations omitted). Importantly, "the use of the mails need not [itself] be an essential element of the scheme." Id. at 710, 109 S.Ct. 1443; see also United States v. Maze, 414 U.S. 395, 400, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974); Pereira, 347 U.S. at 8, 74 S.Ct. 358; Edwards, 188 F.3d at 235.

Moreover, the Supreme Court has stated that "[m]ailings occurring after receipt of the goods obtained by fraud are within the statute if they were `designed to lull the victims into a false sense of security, postpone their ultimate complaint to the authorities, and therefore make the apprehension of the defendants less likely than if no mailings had taken place.'" United States v. Lane, 474 U.S. 438, 451-52, 106 S.Ct. 725, 88 L.Ed.2d 814 (1986) (quoting Maze, 414 U.S. at 403, 94 S.Ct. 645). We have applied this doctrine to cases in which the mailings were made after the defendant obtained the victims' property. See Godwin, 272 F.3d at 668 (concluding that a jury could find...