U.S. v. Sneed

• Decision Date: 24 August 1995
• Docket Number: No. 94-50148,94-50148
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Paula SNEED, Norris Louis McGraw, Patrick Johnson, and Sharon Ann Polley, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 381

63 F.3d 381

UNITED STATES of America, Plaintiff-Appellee, v. Paula SNEED, Norris Louis McGraw, Patrick Johnson, and Sharon Ann Polley, Defendants-Appellants.

No. 94-50148.

United States Court of Appeals, Fifth Circuit.

Aug. 24, 1995.

Gerald R. Lopez (Court-appointed), Odessa, TX, for Norris L. McGraw.

Douglas C. McNabb, Houston, TX, for Polley, Sneed & Johnson.

Richard L. Durbin, Jr., Asst. U.S. Atty., James H. DeAtley, Acting U.S. Atty., for appellee.

Appeals from the United States District Court for the Western District of Texas.

Before POLITZ, Chief Judge, EMILIO M. GARZA, and STEWART, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

Paula Sneed, Norris McGraw, Patrick Johnson, and Sharon Polley were convicted of conspiracy to commit mail fraud in violation of 18 U.S.C. Secs. 371, 1341 (1988). Norris McGraw was also convicted of money laundering in violation of 18 U.S.C. Sec. 1956 (1988). Sneed, McGraw, Johnson, and Polley appeal their convictions and sentences, and we affirm in part, vacate in part, and remand in part.

I

Sneed, McGraw, Johnson, and Polley were convicted of conspiring to commit mail fraud for their participation in one or both of two Houston telemarketing operations, Gulf Coast Network ("GCN") and Century Premier Associates ("CPA"). ¹ Before Sneed and Johnson worked at either GCN or CPA, they were salespersons for another Houston telemarketing business, Bemer Enterprises ("Bemer"). Bemer telemarketers would phone individuals, whose name and numbers appeared on a list purchased from another company, and inform them that they could receive one of three prizes: a car, a $2,000 cashier's check, or a jewelry package. Bemer customers would have to buy $398 worth of cleaning supplies in order to receive one of the prizes, and only jewelry packages were ever awarded.

McGraw began operating CPA out of the Bemer offices. He started CPA with money that he borrowed from Yousif Daoud, generally known as Joe David. McGraw was initially the sole employee of CPA, but he soon hired Polley and other telemarketers to work for him. He operated CPA out of the Bemer offices for about three weeks, and then moved the business into other offices. Not long after the move, Polley switched from being a CPA telemarketer to being CPA's receptionist. McGraw also hired more telemarketers, including Sneed and Johnson.

Telemarketers at CPA phoned individuals and told them that they had won a large prize, usually $10,000, but ranging from a mink coat to as much as $500,000 in cash, or that they had won one of a group of such prizes. The telemarketers then told the individuals that they could receive their prize only if they sent CPA a check to cover what was variously represented as gift taxes or shipping and handling expenses. The telemarketers instructed the individuals to send their checks to CPA, via Federal Express, at either a Houston address or a Midland, Texas, address. The amount of the check, usually between $400 and $600, was determined by the telemarketer, and represented the largest amount the telemarketer thought the individual was likely to pay. Telemarketers worked on commission, receiving twenty percent of the amount sent in by their respective "customers."

Checks sent to Midland would be received by David, who deposited them in a Midland bank account that he had opened, under an assumed name, at McGraw's request; and checks sent to Houston would be forwarded to Midland to be deposited in the same account. David would deposit the checks in the account, keep five percent of the money, and wire the remainder to McGraw. McGraw used the money to pay commissions and other CPA expenses.

The FBI, which began investigating CPA's activities after the Midland Police Department received a complaint about the company, raided CPA's offices. Thirteen people were ultimately charged under an indictment that included counts of mail fraud, conspiracy to commit mail fraud, money laundering, and conspiracy to launder monetary instruments. Defendants other than Sneed, McGraw, Johnson, and Polley entered plea agreements, and many testified as Government witnesses at trial. A federal jury found Sneed, McGraw, Johnson, and Polley guilty of conspiring to commit mail fraud, and also found McGraw guilty of money laundering.

Sneed, Johnson, and Polley appeal their convictions and sentences, arguing that (1) insufficient evidence supports the jury's verdict against them on the mail fraud count and (2) the district court improperly determined their base offense levels. McGraw appeals his conviction on the money laundering counts, arguing that insufficient evidence supports the jury's verdict against him.

II

Sneed, Johnson, and Polley contend that insufficient evidence supports the jury's verdict against them on the conspiracy to commit mail fraud count, and McGraw contends that insufficient evidence supports the jury's verdict against him on the money laundering counts. In our review of the sufficiency of the evidence supporting a jury's verdict, "we determine whether, viewing the evidence and the inferences that may be drawn from it in the light most favorable to the verdict, a rational jury could have found the essential elements of the offenses beyond a reasonable doubt." United States v. Pruneda-Gonzalez, 953 F.2d 190, 193 (5th Cir.), cert. denied, 504 U.S. 978, 112 S.Ct. 2952, 119 L.Ed.2d 575 (1992). ² We recognize that the jury was "free to choose among all reasonable constructions of the evidence," United States v. Chaney, 964 F.2d 437, 448 (5th Cir.1992), and we "accept all credibility choices that tend to support the jury's verdict." United States v. Anderson, 933 F.2d 1261, 1274 (5th Cir.1991).

A

Sneed, Johnson, and Polley argue that a rational jury could not have found beyond a reasonable doubt that they were guilty of conspiring to commit mail fraud. The three elements of conspiracy to commit mail fraud are "(1) an agreement between appellants and others (2) to commit the crime of mail fraud, and (3) an overt act committed by one of the conspirators in furtherance of that agreement." United States v. Massey, 827 F.2d 995, 1001 (5th Cir.1987). To be guilty of conspiracy to commit mail fraud, Sneed, Johnson, and Polley must have had the requisite intent to commit mail fraud. See id. (holding that " 'conspiracy to commit a particular substantive offense cannot exist without at least the degree of criminal intent necessary for the substantive offense itself' " (quoting Ingram v. United States, 360 U.S. 672, 678, 79 S.Ct. 1314, 1319, 3 L.Ed.2d 1503 (1959))). Mail fraud, however, has no specific intent requirement regarding use of the mails. See Massey, 827 F.2d at 1002. ³ "The test to determine whether a defendant caused the mails to be used is whether the use was reasonably foreseeable. The defendant need not intend to cause the mails to be used." Massey, 827 F.2d at 1002. ⁴ "The government's burden, therefore, is to demonstrate beyond a reasonable doubt that appellants agreed to engage in a scheme to defraud in which they contemplated that the mails would likely be used." Id.

Sneed, Polley, and Johnson contend that a rational jury could not have found beyond a reasonable doubt that they agreed to engage in a scheme to defraud. " 'The members of a conspiracy which functions through a division of labor need not ... be privy to the details of each aspect of the conspiracy.' " United States v. Faulkner, 17 F.3d 745, 769 (5th Cir.) (quoting United States v. Richerson, 833 F.2d 1147, 1154 (5th Cir.1987)), cert. denied, --- U.S. ----, 115 S.Ct. 193, 130 L.Ed.2d 125 (1994). Further, "[a]lthough each element of the conspiracy charge must be proved beyond a reasonable doubt, no element need be proved by direct evidence, but may be inferred from circumstantial evidence." United States v. Espinoza-Seanez, 862 F.2d 526, 537 (5th Cir.1988). Thus, the jury may infer an agreement from concert of action, voluntary participation from a collocation of circumstances, and knowledge from surrounding circumstances. Id.

The trial testimony of the Government's witnesses established that some CPA and GCN telemarketers other than Sneed, Polley, and Johnson were aware that McGraw's operation was illegitimate and conducted business in a manner consistent with such knowledge. Telemarketers other than Sneed, Polley, and Johnson testified that they solicited under assumed names and would tell customers that they had won a specific prize rather than one of a group of possible prizes. They testified that they were given the discretion to determine what amount of money they would ask customers to send in to claim the prize. Victims of the conspiracy confirmed the telemarketers' account.

Evidence of Sneed's involvement, viewed in the light most favorable to the jury's verdict, established that (1) Sneed worked for McGraw as a telemarketer at the second office; (2) during that time, Sneed worked under the assumed name "Paula Martin;" (3) Sneed had not used an assumed name when she worked as a telemarketer at Bemer; (4) three witnesses received calls from "Paula Martin;" (5) while Sneed testified that she would always ask customers to send in the same amount of money, $498.15, two witnesses were asked by Paula Martin to send in a different amount; and (6) while Sneed testified that she never told customers that they had won a specific prize, all three witnesses had been told exactly what prize they allegedly had won.

Evidence of Johnson's involvement, viewed in the light most favorable to the jury's verdict, established that (1) Johnson worked for McGraw as a telemarketer at the second office; (2) while Johnson claimed that he had worked at CPA for only three or four days, two of his calls were made seven days apart; (3) during that time, Johnson worked under the assumed names "James Wilson" and "Jim Wilson;" (4) while Johnson claimed to have used a false name because there had been other telemarketers named Johnson at Bemer,...