U.S. v. Ratcliff

• Decision Date: 31 May 2007
• Docket Number: No. 05-30666.,05-30666.
• Citation: 488 F.3d 639
• Parties: UNITED STATES of America, Plaintiff-Appellant-Cross-Appellee, v. Barney Dewey RATCLIFF, Jr., Defendant-Appellee-Cross-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

488 F.3d 639

UNITED STATES of America, Plaintiff-Appellant-Cross-Appellee, v. Barney Dewey RATCLIFF, Jr., Defendant-Appellee-Cross-Appellant.

No. 05-30666.

United States Court of Appeals, Fifth Circuit.

May 31, 2007.

Corey Ross Amundson (argued), M Patricia Jones, Asst. U.S. Atty., Baton Rouge, LA, Michael R. Dreeben, U.S. Dept. of Justice, Washington, DC, for U.S.

Lewis O. Unglesby (argued), Unglesby Law Firm, John A. Baker, LA State University, Paul M. Hebert Law Ctr., Baton Rouge, LA, for Ratcliff.

Appeals from the United States District Court for the Middle District of Louisiana.

Before KING, GARZA and PRADO, Circuit Judges.

KING, Circuit Judge:

Defendant-appellee-cross-appellant Barney Dewey Ratcliff, Jr. was charged by indictment with fourteen counts of mail fraud, in violation of 18 U.S.C. § 1341, based on alleged activities involving election fraud in Louisiana. The district court granted Ratcliff's motion to dismiss the counts, concluding that the indictment did not allege a scheme to defraud anyone of money or property, thereby failing to state the offense of mail fraud under § 1341. The United States now appeals, arguing that a scheme to obtain the salary and employment benefits of elected office through election fraud satisfies the requirements of the mail fraud statute. We AFFIRM.¹

I. FACTUAL AND PROCEDURAL BACKGROUND

Livingston Parish, Louisiana, operates under a home rule charter providing that its citizens elect a parish president for a four-year term. See LA. CONST. art. VI, § 5; LIVINGSTON PARISH HOME RULE CHARTER § 3-02. In 1999, Ratcliff was the incumbent Livingston Parish president and a candidate for reelection.

Candidates for public office in Louisiana must abide by the provisions of Louisiana's Campaign Finance Disclosure Act ("CFDA"), LA.REV.STAT. ANN. §§ 18:1481-:1532. The CFDA prohibits any candidate for parishwide elective office, including the parish presidency, from receiving contributions, loans, or loan guarantees in excess of $2500 from any individual. Id. §§ 18:1483(7)(b),:1505.2(H). Candidates must also file campaign finance disclosure reports with the Louisiana Board of Ethics (the "Board" or "Board of Ethics"). Id. § 18:1484. The reports are to detail all campaign contributions, loans, loan guarantors, and expenditures. Id. § 18:1495.5.

According to the indictment, Ratcliff obtained several loans violative of the CFDA from September to November 1999. On September 23, 1999, Ratcliff obtained a $50,000 bank loan for the purpose of financing his reelection campaign. Ratcliff had insufficient income and assets to qualify for the loan, and a local businessman with sufficient assets served as cosigner. One week later, on October 7, Ratcliff obtained another $50,000 loan with the same businessman as cosigner. The cosigner also assigned a $50,000 certificate of deposit as collateral.

On October 12, Ratcliff filed with the Board of Ethics a campaign finance disclosure report in which he disclosed the first loan and the businessman's guarantee of that loan. On October 19, a staff member of the Board advised Ratcliff that the businessman's guarantee possibly violated the CFDA. In response, Ratcliff informed the Board that he had instructed the bank to prepare new loan documents for his signature alone.

On October 22, Ratcliff obtained two new loans to pay off the loans that had been improperly guaranteed by the businessman. The indictment charges that the new loans were secured by a pledge of $99,000 in cash, supplied by one of Ratcliff's wealthy supporters who had a financial interest in the transfer of a permit for operation of a landfill in Livingston Parish to Waste Management, Inc. ("Waste Management"). The transfer, which was allegedly supported by Ratcliff, was a major election issue. Ratcliff obtained another $50,000 loan on November 3, allegedly secured by a pledge of $55,000 in cash supplied by the same wealthy supporter. The indictment asserts that Ratcliff knew that his receipt of the cash for all three loans violated the $2500 individual loan limitation and that he did not report it in his campaign finance disclosure reports.

Ratcliff was reelected as parish president on November 20. During the course of the campaign, Ratcliff had contracted with a political consultant to help with his reelection bid, and by the time of the election, Ratcliff owed the consultant over $57,000. On November 22, a Waste Management lobbyist allegedly gave Ratcliff approximately $44,000 in cash for Ratcliff's political consultant to hold as collateral until Ratcliff paid the consultant the money owed. The indictment alleges that Ratcliff knew that his use of the cash to secure a campaign debt violated the $2500 statutory limitation and that Ratcliff did not disclose the illegal loan in his campaign finance disclosure reports.

In addition to Ratcliff's failure to report the amount and source of certain cash and loans he received, he allegedly misled the Board of Ethics during its investigation of his activities. Specifically, the indictment alleges that Ratcliff falsely represented that he had the creditworthiness to obtain the original loans on September 23 and October 7, 1999, without a cosigner and that the replacement loans were obtained on the basis of his independent creditworthiness. And despite requests from the Board for information on his use of collateral to secure the replacement loans, Ratcliff allegedly failed to disclose that the collateral was borrowed cash. The indictment also asserts that Ratcliff used the mails to submit a campaign finance disclosure report and two letters concerning the ethics investigation to the Board of Ethics, as well as to receive the financial benefits of office.

After Ratcliff's reelection as parish president, Ratcliff served in office from January 10, 2000, to January 12, 2004. During this term, Ratcliff allegedly received over $300,000 in salary and employment benefits from the parish.

On November 3, 2004, Ratcliff was charged by indictment with fourteen counts of mail fraud and one count of making a false statement to a financial institution.² With regard to the mail fraud counts, the Government alleged that Ratcliff used the mails in a scheme to defraud Livingston Parish of the salary and employment benefits of elected office through misrepresentations he made to the Board of Ethics concerning the financing of his campaign. According to the Government, Ratcliff secured his reelection as parish president by obtaining the illegal funding and concealing his violations from the Board of Ethics.

On March 1, 2005, Ratcliff filed a motion to dismiss the mail fraud counts. After hearing oral argument on the motion, the district court granted the motion on May 23. The Government appealed.

II. DISCUSSION

The Government contends that Ratcliff's indictment sufficiently charged the offense of mail fraud because the salary and employment benefits of elected office constitute "money or property" under the mail fraud statute and because fraudulent job procurement can constitute mail fraud in the election context just as it can in the typical hiring context. Ratcliff counters that any misrepresentations he allegedly made to the Board of Ethics, which is a state entity, were unrelated to the salary and benefits paid as a matter of course by Livingston Parish, which is a distinct, local entity.

We review the sufficiency of an indictment de novo, taking the indictment's allegations as true. United States v. Crow, 164 F.3d 229, 234 (5th Cir.1999). The Federal Rules of Criminal Procedure require that the indictment be "a plain, concise and definite written statement of the essential facts constituting the offense charged." FED.R.CRIM.P. 7(c)(1). The indictment is sufficient if it "alleges every element of the crime charged and in such a way as to enable the accused to prepare his defense and to allow the accused to invoke the double jeopardy clause in any subsequent proceeding." United States v. Bieganowski, 313 F.3d 264, 285 (5th Cir. 2002) (citation and internal quotation marks omitted). When reviewing the indictment, we must keep in mind that "the law does not compel a ritual of words" and that an indictment's validity depends on practical, not technical, considerations. Crow, 164 F.3d at 235 (quoting United States v. Devoll, 39 F.3d 575, 579 (5th Cir.1994)). And "[t]he starting place for any determination of whether the charged conduct [is] proscribed by [a criminal] statute is a reading of the language of the charging instrument and the statute itself." United States v. White, 258 F.3d 374, 381 (5th Cir.2001) (second and third alterations in original) (quoting United States v. Morales-Rosales, 838 F.2d 1359, 1361 (5th Cir.1988)).

To sufficiently charge the offense of mail fraud,³ the indictment must allege that (1) the defendant devised or intended to devise a scheme to defraud, (2) the mails were used for the purpose of executing, or attempting to execute, the scheme, and (3) the falsehoods employed in the scheme were material.⁴ United States v. Caldwell, 302 F.3d 399, 409 (5th Cir.2002). The first element includes a defendant's scheme or artifice (1) "to deprive another of the intangible right of honest services," 18 U.S.C. § 1346, (2) "for obtaining money or property by means of false or fraudulent pretenses, representations, or promises,"⁵ 18 U.S.C. § 1341, or (3) "to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious . . . article," 18 U.S.C. § 1341. See Caldwell, 302 F.3d at 406. Only the second type of scheme or artifice is at issue in this appeal, as Ratcliff was charged with a scheme to defraud Livingston Parish of the money and property represented by "the powers, privileges, salary, and other benefits" of his elected office.

We do not dispute the Government's contention that a salary and other financial employment benefits can constitute ...