U.S. v. Smith, 96-1245

• Citation: 133 F.3d 737
• Decision Date: 31 December 1997
• Docket Number: No. 96-1245,96-1245
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Benjamin Alex SMITH, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

Page 737

133 F.3d 737

UNITED STATES of America, Plaintiff-Appellee, v. Benjamin Alex SMITH, Defendant-Appellant.

No. 96-1245.

United States Court of Appeals, Tenth Circuit.

Dec. 31, 1997.

Submitted on the briefs. ^*

Henry L. Solano, United States Attorney, and Gregory C. Graf, Assistant United States Attorney, Denver, CO, for Plaintiff-Appellee.

Nina A. Iwashko of Canges, Iwashko & Bethke, P.C., Denver, CO, for Defendant-Appellant.

Before BRORBY, BARRETT and McKAY, Circuit Judges.

BRORBY, Circuit Judge.

Benjamin Alex Smith was charged by indictment and convicted of six counts of wire fraud, and aiding and abetting in violation of 18 U.S.C. §§ 1343 and 2, and one count of mail fraud, and aiding and abetting, in violation of 18 U.S.C. §§ 1341 and 2. The district court sentenced him to fifty-seven months of imprisonment on each count, all counts to run concurrently. Mr. Smith appeals both his conviction and the sentence imposed under the Sentencing Guidelines. See U.S. Sentencing Guideline's Manual (Nov. 1995) ("U.S.S.G.").

On appeal, Mr. Smith raises three issues. First, he alleges the evidence is insufficient to support his conviction. Second, he contends the district court erred when it increased his base level offense by two levels pursuant to U.S.S.G. § 2F1.1(b)(3)(A). Lastly, Mr. Smith challenges the district court's imposition of a four-level upward departure pursuant to U.S.S.G. § 5K2.0 based on the district court's finding the Sentencing Commission failed to consider adequately those factors contained in 18 U.S.C. § 2326, part of the Senior Citizens Against Marketing Scams Act of 1994 (hereinafter the SCAMS Act), and its particularized finding that this case fell outside the heartland of the guidelines. We exercise jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C. § 3742. We will address each of these matters in turn.

I.

Mr. Smith, charged with six counts of wire fraud and aiding and abetting, and one count of mail fraud and aiding and abetting, was tried jointly with his co-defendant Elizabeth Marjorie Robertson. Evidence introduced against Mr. Smith included the testimony of three victim-witnesses; the testimony of co-defendant Richard Steven Clark; records seized from his employer and introduced through the testimony of investigating Federal Bureau of Investigation agents; and the testimony of one agent sworn as an expert on telemarketing fraud. The following was presented to the jury at trial.

Mr. Smith was employed by Say No Now, a telemarketing operation or "boiler room," from January 1995 through at least October 1995. He was employed as a telephone solicitor. As such, Mr. Smith would solicit contributions for Say No Now by making unsolicited telephone calls to potential donors. Mr. Smith would also contact individuals who had contributed in the past, a solicitation known as a "reload."

Say No Now had obtained § 501(c)(3) status under the Internal Revenue Code (I.R.C.) from the Internal Revenue Service based on its representations to the Service. Say No Now solicitors represented the organization to potential donors as a charity devoted to helping children stay off drugs. To further entice potential donors to contribute to Say No Now, Mr. Smith and his co-defendants would tell victims they had been selected to receive their "fair share" of $75,000 in prizes and awards to donors. Victims were told they would receive more in prizes than the value of their donations. In actuality, having contributed thousands of dollars, donors received only pencil sets, board games, figurines, and savings bonds in return. Using this "pitch," Say No Now solicitors collected over $915,000 from January 1995 through October 1995. During this time, Say No Now made only one charitable contribution of $45, and returned approximately $26,000 in awards to donors.

Say No Now specifically targeted elderly persons, a group perceived as lonely, trusting and more polite, hence less likely to hang up before the telemarketer could make his pitch. Mr. Smith's victims included Mrs. Leona Akey, an eighty-three-year-old widow living alone, Mrs. Iola Hart, a widow since 1946, and Ms. Martha Nix, an eighty-five-year-old retiree, living alone. All of these victims lived in Colorado. All were called by Mr. Smith from the Say No Now offices in Las Vegas, Nevada. Victims were directed to note a particular claim number, actually Mr. Smith's employee number, on their checks, and to send their donations to the Say No Now office in Las Vegas immediately via United Parcel Service or other private carriers. Use of express mail both minimized the chance victims would change their minds and facilitated expeditious payment of Mr. Smith and the other solicitors. Mr. Smith was paid on a commission basis. He was the second most successful solicitor at Say No Now.

The jury convicted Mr. Smith of all charged counts. At sentencing, the district court calculated Mr. Smith's sentence as follows: Under U.S.S.G. § 2F1.1(a), the base offense level for offenses involving fraud or deceit is six. The district court then enhanced the base offense level by seven levels, pursuant to U.S.S.G. § 2F1.1(b)(1)(H), for losses of $157,525 attributable to Mr. Smith; by two levels pursuant to § 2F1.1(b)(2) for more than minimal planning and multiple victims; by two levels pursuant to § 3A1.1(b) for vulnerable victims; and by two levels pursuant to § 2F1.1(b)(3)(A) for misrepresentation that he was acting on behalf of a charitable organization, thus arriving at a total offense level of nineteen. The district court then imposed a four-level upward departure under U.S.S.G. § 5K2.0 based on a finding that Mr. Smith's conduct fell outside the heartland of the typical cases of fraudulent conduct encompassed by the guidelines. The district court specifically pointed to the congressional intent underlying the SCAMS Act as one factor providing a basis for the departure. Thus, Mr. Smith had an adjusted offense level of twenty-three, with a guideline range of forty-six to fifty-seven months imprisonment. The district court sentenced Mr. Smith to fifty-seven months on each count, to be served concurrently.

II. Sufficiency of the Evidence

Mr. Smith contends there was insufficient evidence presented at trial to support his convictions for six counts of wire fraud, in violation of 18 U.S.C. § 1343, and aiding and abetting, in violation of 18 U.S.C. § 2, and one count of mail fraud, in violation of 18 U.S.C. § 1341, and aiding and abetting, again in violation of 18 U.S.C. § 2. In evaluating a challenge to the sufficiency of the evidence to support a jury verdict, this court reviews the entire record de novo in the light most favorable to the government to determine whether a reasonable jury could find guilt beyond a reasonable doubt, based on the direct and circumstantial evidence, together with the reasonable inferences to be drawn therefrom. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979); United States v. Voss, 82 F.3d 1521, 1524-25 (10th Cir.), cert. denied, --- U.S. ----, 117 S.Ct. 226, 136 L.Ed.2d 158 (1996). "We do not use this evaluation as a chance to second-guess the jury's credibility determinations, nor do we reassess the jury's conclusions about the weight of the evidence presented." United States v. Johnson, 57 F.3d 968, 971 (10th Cir.1995). However, the evidence supporting a jury's verdict must be substantial, raising more than a mere suspicion of guilt. United States v. Leos-Quijada, 107 F.3d 786, 794 (10th Cir.1997).

To establish mail fraud, the government must prove the existence of a scheme to defraud or obtain money by means of false pretenses, representations, or promises; the specific intent to defraud; and the use of the mails in furtherance of the scheme. ² Pereira v. United States, 347 U.S. 1, 8, 74 S.Ct. 358, 362-63, 98 L.Ed. 435 (1954); United States v. Kennedy, 64 F.3d 1465, 1475 (10th Cir.1995). The essential elements of wire fraud are a scheme to defraud and use of interstate wire or radio communications to facilitate the scheme. ³ United States v. Galbraith, 20 F.3d 1054, 1056 (10th Cir.), cert. denied, 513 U.S. 889, 115 S.Ct. 233, 130 L.Ed.2d 157 (1994). To be liable as an aider and abettor under 18 U.S.C. § 2, the evidence must establish a defendant associated himself with a criminal venture; participated in the venture as something he wished to bring about; sought by his actions to make the venture succeed; and the evidence must establish both the commission of the offense by someone and the aiding and abetting by the defendant. United States v. Hanson, 41 F.3d 580, 582 (10th Cir.1994).

While challenging generally the sufficiency of the evidence to sustain his convictions, Mr. Smith raises only two specific issues on appeal. First, he contends the government did not present sufficient evidence from which a jury could conclude he made false representations to Say No Now donors. Second, Mr. Smith claims the government failed to prove he knew Say No Now was not a legitimate charitable organization.

Mr. Smith claims the evidence did not support the mail fraud verdict because "[e]very representation he made of a material nature was, in all material aspects, true." We disagree. Three of Mr. Smith's victims testified for the prosecution. The similarities across the testimony of these witnesses indicates Mr. Smith gave the same "pitch" to potential donors. Mr. Smith represented Say No Now as a charity and told donors money sent to Say No Now would be used on behalf of children. In fact, the evidence presented at trial showed Say No Now gave only a pittance to charity, one $45 contribution from the more than $915,000 collected in the relevant ten-month period. Moreover, Mr. Smith repeatedly told donors they would get more in return from Say No Now in the form of awards than they were contributing; they would share in $75,000 in cash and prizes. But while donors were sending in checks totaling thousands of...