U.S. v. Slevin, 82

• Decision Date: 18 December 1996
• Docket Number: D,No. 82,82
• Citation: 106 F.3d 1086
• Parties: UNITED STATES of America, Appellee, v. Frank SLEVIN, Defendant-Appellant, William Leslie, Defendant. ocket 95-1713.
• Court: U.S. Court of Appeals — Second Circuit

Page 1086

106 F.3d 1086

UNITED STATES of America, Appellee, v. Frank SLEVIN, Defendant-Appellant, William Leslie, Defendant.

No. 82, Docket 95-1713.

United States Court of Appeals,

Second Circuit.

Argued Aug. 29, 1996.

Decided Dec. 18, 1996.

Harry R. Pollak, New York City, for Defendant-Appellant.

Susan E. Brune, Assistant United States Attorney for the Southern District of New York, New York City, (Mary Jo White, United States Attorney, Marian W. Payson, Assistant United States Attorney, New York City, of counsel), for Appellee.

Before: MESKILL, KEARSE, and MAHONEY ^*, Circuit Judges.

MAHONEY, Circuit Judge ^**:

Defendant-appellant Frank Slevin appeals from a judgment of conviction entered on December 27, 1995 in the United States District Court for the Southern District of New York. A jury found Slevin guilty on one count of conspiracy to commit mail and wire fraud in violation of 18 U.S.C. § 371, five counts of mail fraud in violation of 18 U.S.C. § 1341, and one count of wire fraud in violation of 18 U.S.C. § 1343. Slevin raises several challenges to his convictions and sentencing. First, he challenges the sufficiency of the evidence that he was engaged in a "scheme ... to defraud" in violation of the mail and wire fraud statutes. See 18 U.S.C. §§ 1341, 1343. Next, he argues that the use of the mails in this case was not "in furtherance" of his fraudulent scheme. See id. Finally, he contends that the sentencing court erred in refusing to hold a full evidentiary hearing regarding the amount of economic loss borne by his victims. Finding no merit in his contentions, we affirm.

Background

Between 1988 and 1994, Slevin established several offshore corporations that provided construction contractors with payment and performance bonds. Such bonds insure contract obligees against contractor defaults. The federal government keeps a list of bonding companies (the "Treasury list") that are licensed, well-capitalized, and have established a record of reliable performance on their obligations. Bonds from such companies are typically required by contract obligees, sometimes even as a prerequisite to bidding on construction contracts.

Slevin's enterprise provided payment and performance bonds, directly or through brokers, to companies that were unable to acquire bonds from Treasury-listed companies. In this venture, using an umbrella corporation called Manufacturers, Retailers and Contractors Association, Limited, which he portrayed as a Virgin Islands company, Slevin provided fraudulently-obtained signatures and false documents; he employed a network of mail drops and a telephone answering service in St. Thomas, U.S. Virgin Islands. Slevin's actual "office" was in a garage behind a house in Brooklyn, New York. Slevin's bonds, which bore issuer names that were deceptively close to the names of actual Treasury-listed companies, were then used by the contractors to secure construction contracts. Contractors paid Slevin's umbrella corporation $500 to be part of an association which enabled them to purchase bonds issued by Slevin's other companies. Contractors also paid premiums for the bonds, typically two-to-three percent of the contract price. The contractors were then typically reimbursed by the contract obligees for the bond premiums.

Slevin's shell companies were seriously undercapitalized, and he apparently never planned to pay claims in the event of a contractor default. To preserve his enterprise, however, Slevin went to great lengths to discourage contractors from defaulting and to retain the confidence of contract obligees. For example, in at least one case, he contacted the obligee directly; in another, he created a fraudulent auditing statement to assuage obligee concerns. Nevertheless, when contract obligees seemed to be incurably suspicious, ^*** or when a contractor defaulted, as occurred on at least one occasion, Slevin would simply disappear, later to reemerge under a different bonding company name, and the cycle began anew.

Slevin intentionally avoided providing bonds for federal contracts so as to avoid potential federal racketeering charges, and he avoided using the mails, attempting to avoid exposure to mail fraud charges. The mail fraud charges on which Slevin was convicted were based on the mailing of checks by contract obligees to contractors as reimbursement for the costs of the bond premiums the latter had paid to Slevin's companies.

Slevin was convicted by a jury on June 13, 1995. On December 13, 1995, the Honorable Peter K. Leisure, United States District Judge, sentenced Slevin principally to a 78-month term of imprisonment, which he is currently serving, and ordered him to pay restitution. In calculating Slevin's sentence, Judge Leisure accepted, without a full evidentiary hearing, an estimate from the Probation Department that the economic harm to Slevin's victims totaled $6,952,874.50. Before accepting this estimate, Judge Leisure reviewed trial testimony regarding damages, received written submissions, and heard oral argument. This appeal followed.

Discussion

A. The Sufficiency of the Evidence of a Scheme To Defraud

The federal fraud statutes prohibit the use of the mails or wires in furtherance of "any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises." 18 U.S.C. §§ 1341, 1343. Because these statutes use the same relevant language, they are analyzed in the same way. See, e.g., United States v. Schwartz, 924 F.2d 410, 416 (2d Cir.1991); United States v. Covino, 837 F.2d 65, 71 (2d Cir.1988).

Slevin first challenges the sufficiency of the evidence to support his convictions of mail and wire fraud, arguing that the government showed only that his bonding companies were undercapitalized, not that he was engaged in a scheme to defraud. In order to prevail on such a challenge, Slevin must show that the evidence was not adequate " 'to convince any rational trier of fact beyond a reasonable doubt' " that he was engaged in such a scheme. United States v. Valenti, 60 F.3d 941, 945 (2d Cir.1995) (quoting United States v. Sureff, 15 F.3d 225, 228 (2d Cir.1994)) (emphasis ours). Viewing the evidence in the light most favorable to the government and drawing all permissible inferences in the government's favor, as we must, see id., we regard Slevin's challenges to the sufficiency of the evidence as meritless.

Contrary to Slevin's argument, the government presented evidence not merely that Slevin was operating undercapitalized bonding companies but evidence that he had devised and was engaged in an imaginative scheme to deceive and defraud. He used company names that were deceptively similar to those of legitimate entities in an attempt to pass off his bonds as those of Treasury-listed issuers. He used an elaborate network of addresses that were no more than mail drops, ring-through telephone lines, and telephone answering services to give his shell companies the appearance of legitimacy. He falsified some signatures and documents; he procured others under false pretenses. He prepared or caused to be prepared false financial statements to deceive contract obligees about the solvency of his companies. For example, one false audit by an apparently fictitious accountant was prepared to address an obligee's concerns. Slevin also attempted to purchase a second auditing statement from an actual accountant who, Slevin was told, would prepare audited financial statements without reviewing any documentation or otherwise verifying the information in the statements.

There was also ample evidence that all of this was done with intent to deceive and defraud, and to enrich Slevin. When a contractor defaulted, Slevin simply caused the bond-issuing company to disappear. A cooperating coconspirator testified at trial as to details Slevin had confided in him with respect to how the scheme worked, Slevin's intent to defraud, and what they must do to avoid racketeering and mail fraud charges.

This evidence sufficed to meet the scheme-to-defraud element as it has been interpreted by this Court. See, e.g., United States v. Wallach, 935 F.2d 445, 461 (2d Cir.1991) (holding that government need prove only fraudulent intent and that defendant "contemplated some actual harm or injury"), cert. denied, 508 U.S. 939, 113 S.Ct. 2414, 124 L.Ed.2d 637 (1993); see also United States v. Altman, 48 F.3d 96, 101 (2d Cir.1995) ("The Supreme Court early on gave the scheme to defraud element a broad interpretation, construing it to 'include[ ] everything designed to defraud by representations as to the past or present, or suggestions and promises as to the future.' " (quoting Durland v. United States, 161 U.S. 306, 313, 16 S.Ct. 508, 511, 40 L.Ed. 709 (1896))). Here, there was strong evidence of intent, deception, and not only contemplated harm, as required by Wallach, but realized harm. We accordingly reject Slevin's first sufficiency challenge.

B. The "In Furtherance" Requirement

Slevin next contends that the government failed to establish that there were any mailings "in furtherance" of his fraudulent scheme. He points out that the proven mailings, of checks by contract obligees sent as reimbursement to contractors for the bond premiums that contractors had paid to Slevin's shell companies, occurred after Slevin had received payment for the bonds from the contractors. He argues, relying on United States v. Maze, 414 U.S. 395, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974), Kann v. United States, 323 U.S. 88, 65 S.Ct. 148, 89 L.Ed. 88 (1944), and United States v. Altman, 48 F.3d 96, that since the mailings occurred after he had received payments, the mailings could not have been in furtherance of the fraud. We disagree.

In order to convict Slevin of mail fraud, the government was required to show "1) a scheme or artifice to defraud 2) for the purpose of obtaining money or property ... and 3) use of the mails in furtherance of the scheme." Alt...