U.S. v. Redzic

• Citation: 627 F.3d 683
• Decision Date: 06 December 2010
• Docket Number: Nos. 08-2418,Nos. 08-3662,s. 08-2418,s. 08-3662
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Mustafa REDZIC, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

627 F.3d 683 UNITED STATES of America, Plaintiff-Appellee, v. Mustafa REDZIC, Defendant-Appellant. Nos. 08-2418, 08-3662. United States Court of Appeals, Eighth Circuit. Submitted: Sept. 30, 2010. Filed: Dec. 6, 2010.

Mustafa Redzic, pro se on supplemental brief.

Thomas C. Albus, AUSA, St. Louis, MO, for appellee.

Before WOLLMAN, JOHN R. GIBSON, and MURPHY, Circuit Judges.

MURPHY, Circuit Judge.

This case is before the court on remand from the United States Supreme Court which vacated our prior judgment on a grant of certiorari and returned the case for further consideration in light of its decision in Skilling v. United States, --- U.S. ----, 130 S.Ct. 2896, 177 L.Ed.2d 619 (2010). After Mustafa Redzic was convicted by a jury of mail fraud, wire fraud, bribery, and conspiracy to commit each of the substantive offenses, he was sentenced by the district court ¹ to concurrent terms of 75 months on each of the substantive counts and 60 months on the conspiracy. Redzic appealed his convictions, arguing that the government had failed to prove he defrauded the state or bribed a state agent and we affirmed. Since the theory of fraud under which Redzic was convicted remains viable under Skilling, we once again affirm his convictions.

I.

Redzic was the owner of Bosna Truck Driving School (Bosna) in St. Louis, Missouri, which trained students to operate commercial vehicles. Students who completedtheir studies at Bosna and wished to obtain a commercial driver license (CDL) were required to be tested at either a state run facility or a private company trained and licensed by the State of Missouri. The required test consisted of a written exam and a three part driving component which included a pre trip inspection, a skills test, and a road test.

Commercial Drivers Training Academy (CDTA) was a licensed third party tester located in Sikeston, Missouri. Redzic's codefendant, Troy Parr, oversaw testing at CDTA.² In order to generate more business and process more CDL applicants, Parr developed a system of "short testing" in which CDTA would omit entire portions of the driving exam or administer it in only a fraction of the time necessary for a proper evaluation. These short tests did not meet the minimum requirements set by the state for CDL testing. Parr regularly gave short tests to Redzic's students and submitted paperwork to the state falsely indicating that the students had successfully met the full requirements for their CDLs. On one occasion Redzic asked Parr to submit paperwork for two students who never even appeared at CDTA, and Parr agreed to do so. A government wiretap also recorded Redzic promising the husband of a potential customer that he could "guarantee" his wife would pass the driving test despite her inability to operate properly a manual transmission.

CDTA charged $150 per student for each test, but Parr testified that Redzic included with his payments to CDTA between $50 to $200 in extra cash on a dozen or more occasions. Parr kept a portion of these overpayments and split the remainder with other CDTA examiners. Redzic also gave Parr two other cash payments of $600 and $2,500. Parr testified that he never requested any of these extra payments although he had been assisting Redzic in his attempt to obtain state certification for Bosna. Such a certification would qualify the school's students for state grant money and could produce another $1 million in business, according to Redzic's estimate. Parr said that he had been willing to consult without payment in exchange for future employment at Redzic's expanded school. He also testified that Redzic had offered him employment to be compensated at some 150 percent of his CDTA salary, a free apartment, bonuses, and free vacations. At Redzic's request Parr rejected a bribe from one of Bosna's competitors and reported the bribery attempt to state authorities. The next day Redzic personally delivered another $2,500 cash payment.

Redzic was charged with and convicted of mail fraud in violation of 18 U.S.C. § 1341, wire fraud in violation of 18 U.S.C. § 1343, bribery in violation of 18 U.S.C. § 666(a)(2), and conspiracy in violation of 18 U.S.C. § 371. Following the close of the government's case, Redzic filed a motion for judgment of acquittal, arguing that the government's evidence was insufficient to sustain any conviction. The district court denied the motion. Redzic chose not to offer any evidence at trial and renewed his motion which was again denied. The jury returned a guilty verdict on all counts.

Redzic subsequently filed a post trial motion for new trial and an amended motion for new trial and for judgment of acquittal. In these post trial motions Redzic raised for the first time a number of issues, including the argument that CDLs are not property for purposes of the federalfraud statutes. The district court denied the motions in May 2008, and Redzic was sentenced the following month. In October 2008 the district court ordered the forfeiture of $25,272.48 in cash, seven trucks, and three trailers pursuant to 28 U.S.C. § 2461.

II.

A.

We first examine Redzic's convictions for mail and wire fraud. The mail fraud statute reads in part as follows:

Whoever, having devised ... any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations or promises ... [uses the mails in furtherance of the scheme shall be punished by imprisonment or fine or both].

18 U.S.C. § 1341. The wire fraud statute is, in pertinent part, identical. See 18 U.S.C. § 1343. The Supreme Court in McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987), interpreted the statutory language to apply only to deprivations of property and noted in particular that it did not encompass "the right to have [a state's] affairs conducted honestly." Id. at 352, 107 S.Ct. 2875.

In response to McNally, Congress broadened the scope of the mail and wire fraud statutes by enacting 18 U.S.C. § 1346. That section provides:

For the purposes of this chapter [including § 1341 and § 1343], the term "scheme or artifice to defraud" includes a scheme or artifice to deprive another of the intangible right to honest services.

18 U.S.C. § 1346. Thus, § 1346 brought schemes to deprive another of honest services within the scope of the mail and wire fraud statutes. In Skilling v. United States, the Supreme Court addressed the scope and constitutionality of § 1346, concluding that the statute criminalizes only "fraudulent schemes to deprive another of honest services through bribes or kickbacks." Skilling, 130 S.Ct. at 2928, 2931.

Nevertheless, Redzic argues that the government failed to invoke this expanded scope of mail and wire fraud. He asserts that the indictment, the government's argument at trial, and the jury instructions all proceeded on the theory that he and Parr had defrauded the state of Missouri of property in the form of CDLs. He argues that as a matter of law "[s]tate and municipal licenses in general ... do not rank as 'property,' for purposes of § 1341, in the hands of the licensor." Cleveland v. United States, 531 U.S. 12, 15, 121 S.Ct. 365, 148 L.Ed.2d 221 (2000). As he points out, Cleveland dealt explicitly with mail fraud as defined in § 1341, but the Supreme Court explained in Carpenter v. United States, 484 U.S. 19, 25, 108 S.Ct. 316, 98 L.Ed.2d 275 n.6 (1987), that "[t]he mail and wire fraud statutes share the same language in relevant part, and accordingly we apply the same analysis to both sets of offenses...." We agree with Redzic that the simple act of fraudulently obtaining a license from a government agency does not deprive that agency of property in the sense of §§ 1341 or 1343.

The government argues, however, that Redzic's fraud extended beyond the licenses themselves, for in order to obtain them for his students Redzic participated in a scheme in which Parr, a licensed agent of the state,³ submitted false paperwork, thereby depriving Missouri of its right to Parr's honest services through the use ofbribes in violation of §§ 1341 and 1343. Redzic responds that the indictment charged him with defrauding the state of property, not honest services, and that to convict him on a honest services theory would amount to a constructive amendment of the indictment in violation of his Fifth Amendment rights. Constructive amendments are per se prejudicial. See United States v. Yeo, 739 F.2d 385, 387 (8th Cir.1984).

Where, as here, the sufficiency of an indictment is challenged after jeopardy has attached, the indictment is upheld "unless it is so defective that by no reasonable construction can it be said to charge the offense for which the defendants were convicted." United States v. Pennington, 168 F.3d 1060, 1064-65 (8th Cir.1999). (quoting United States v. Just, 74 F.3d 902, 904 (8th Cir.1996)). An indictment is insufficient if it fails to allege an essential element of the crime charged, but in determining whether an essential element has been omitted, "a court may not insist that a particular word or phrase appear in the indictment when the element is alleged 'in a form' which substantially states the element." United States v. Mallen, 843 F.2d 1096, 1102 (8th Cir.1988). In this case the indictment fails to use the phrase "honest services," but its factual allegations clearly spell out the substance of Redzic and Parr's bribery scheme. In particular, the indictment includes the following allegations:

(1) Parr was an agent of the State of Missouri in which capacity he served as a CDL examiner.

(2) The proper certification and licensing of commercial truck drivers was "essential to the economic welfare and public safety of Missouri."

(3) Redzic and Parr developed a relationship in which Parr would administer inadequate short tests to Redzic's students.

(4) In one instance, Parr certified two of Redzic's students who had not even shown up at CDTA for testing.

(5) After administering inadequate short tests or failing to

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