U.S. v. Svete

• Decision Date: 02 February 2009
• Docket Number: No. 05-13809.,05-13809.
• Citation: 556 F.3d 1157
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. David W. SVETE, Ron Girardot, Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

556 F.3d 1157

UNITED STATES of America, Plaintiff-Appellee, v. David W. SVETE, Ron Girardot, Defendants-Appellants.

No. 05-13809.

United States Court of Appeals, Eleventh Circuit.

February 2, 2009.

Peter Goldberger, Ardmore, PA, E. Brian Lang (Court-Appointed), E. Brian Lang & Associates, Pensacola, FL, Michael S. Pasano, Carlton Fields, PA, Miami, FL, for Defendants-Appellants.

Michael R. Dreeben, Office of Sol. Gen., Michael A. Rotker and Nina Swift Goodman, U.S. Dept. of Justice, Crim. Div., App. Section, Washington, DC, Benjamin W. Beard, U.S. Atty., Robert G. Davies, Asst. U.S. Atty., Pensacola, FL, E. Bryan Wilson, U.S. Atty., Tallahassee, FL, for U.S.

Appeals from the United States District Court for the Northern District of Florida.

Before EDMONDSON, Chief Judge, and TJOFLAT, ANDERSON, BIRCH, DUBINA, BLACK, CARNES, BARKETT, HULL, MARCUS, WILSON, PRYOR and KRAVITCH,^* Circuit Judges.

PRYOR, Circuit Judge:

This appeal presents the question whether the crime of mail fraud, which prohibits "any scheme or artifice to defraud" by use of the mail, 18 U.S.C. § 1341 (emphasis added), requires proof that the scheme be capable of deceiving a reasonably prudent person or whether schemes aimed at the gullible or improvident are also prohibited. David W. Svete and Ron Girardot appeal their convictions for mail fraud and argue that the district court erred when it refused to instruct the jury that the government must prove that Svete and Girardot devised a scheme reasonably calculated to deceive persons of ordinary prudence and comprehension. The district court instead delivered the pattern jury instructions for mail fraud. Committee on Pattern Jury Instruction, Judicial Council of the Eleventh Circuit Pattern Jury Instructions (Criminal Cases) § 50.1 (West 2003). A panel of this Court held that the district court erred based on our precedent in United States v. Brown, 79 F.3d 1550 (11th Cir.1996), and ordered a new trial as to the counts of mail fraud. United States v. Svete, 521 F.3d 1302, 1310-11 (11th Cir.2008), vacated, 532 F.3d 1133 (11th Cir.2008). We granted rehearing en banc to determine whether to overrule our decision in Brown. Because Brown is inconsistent with both the plain language of the mail fraud statute and precedents of the Supreme Court, we overrule Brown and hold that the district court did not err when it gave the pattern jury instruction for mail fraud. We affirm the decision not to deliver the jury instruction about mail fraud requested by Svete and Girardot and remand to the panel for consideration of any remaining issues.

I. BACKGROUND

Svete, Girardot, and their agents were in the business of selling financial interests in viatical settlements, which are financial products based on agreements with persons (known as viators) who have terminal illnesses and sell their life insurance policies to third parties for less than the mature value of the policies to benefit from the proceeds while alive. Companies controlled by Svete obtained more than one hundred million dollars from more than 3000 investors, more than a third of whom were over the age of 65. Investors who purchased these financial interests from agents of Svete and Girardot testified at trial that the sales agents made false statements and provided them with literature that contained false statements about the life expectancies of viators, the status of the life insurance contracts, and the risks associated with the investments.

Thirty-five investors testified at the trial that sales agents told them that the insurance policies were held by terminally ill patients as determined by independent medical specialists who had access to the viators' complete medical records and doctors, but these statements by the sales agents were false. The viators were not terminally ill, and the information that was reviewed by independent medical professionals was incomplete. The information about many viators was never reviewed by independent doctors. Svete directed a medical underwriter who worked for him to create sham opinions of life expectancy and endorse them with the forged signatures of independent physicians. Some investors testified that they were told that "nobody lives past the terminally ill date," and other investors were told that the viators were supposed to die within six months and, if the viator did not die in that time, the investors need not worry. Many of the investments failed to mature when expected, and the investors were obligated to make additional premium payments when the viator lived longer than expected.

Investors who purchased interests in the viatical settlements were required to sign contracts that acknowledged that the investors had not relied on any representations other than those contained in the contracts. The contracts also contained acknowledgments that the investors were sophisticated in financial matters and had sought or had access to professional advice and that the projected demise dates were only estimates. Several of the investors testified at trial that they did not read or did not understand the contracts and relied on the statements of the sales agents. Nanette Zima, who served as president of LifeTime Capital, Inc., which was the brokerage company formed by Svete in 1997, testified that Svete and Girardot instructed her to alter contracts that had previously been signed by investors without the knowledge or consent of the investors who had signed them.

As a defense to the charges of mail fraud, Svete and Girardot argued that a person of ordinary prudence and sophistication would have read the contracts and ignored the false statements by the sales agents. Svete and Girardot requested the following jury instruction based on that argument:

To prove a fraud crime, the government must show that the defendant under consideration intended to devise or participate in a scheme reasonably calculated to deceive persons of ordinary prudence and comprehension. The person of ordinary prudence standard is an objective standard and is not directly related to the gullibility or level of knowledge and experience of any specific person or persons. For purposes of this offense, the government must prove that a reasonable person of average prudence and comprehension would have acted on the representation made by the defendant under consideration.

The district court rejected the requested jury instruction.

The district court instead gave the pattern jury instruction on mail fraud, which defines a "scheme to defraud" to include "any plan or course of action intended to deceive or cheat someone out of money or property by means of false or fraudulent pretenses, representations, or promises." Pattern Jury Instructions (Criminal Cases) § 50.1, at 282 (West 2003). As part of that instruction, the district court defined materiality: "A material fact is a fact that would be important to a reasonable person in deciding whether to engage or not to engage in a particular transaction. A fact is material if it has a natural tendency to influence or is capable of influencing the decision of the person or entity to whom or which it is addressed." Id. The jury found the defendants guilty of mail fraud.

II. STANDARDS OF REVIEW

"We review a district court's refusal to give a requested jury instruction for abuse of discretion." United States v. Carrasco, 381 F.3d 1237, 1242 (11th Cir. 2004). "In considering the failure of a district court to give a requested instruction, the omission is error only if the requested instruction is correct, not adequately covered by the charge given, and involves a point so important that failure to give the instruction seriously impaired the party's ability to present an effective case." Wood v. President and Trs. of Spring Hill Coll. in City of Mobile, 978 F.2d 1214, 1222 (11th Cir.1992). We review de novo whether a jury instruction mischaracterized the law or misled the jury to the prejudice of the defendant. United States v. Gray, 367 F.3d 1263, 1271 (11th Cir.2004). "[T]he district court is given wide discretion as to the style and wording employed in the instructions," Goldsmith v. Bagby Elevator Co., 513 F.3d 1261, 1276 (11th Cir.2008), and we will reverse only if we are "`left with a substantial and ineradicable doubt as to whether the jury was properly guided in its deliberations.'" Somer v. Johnson, 704 F.2d 1473, 1478 (11th Cir.1983) (quoting Miller v. Universal City Studios, Inc., 650 F.2d 1365, 1372 (5th Cir.1981)). Questions of statutory construction are reviewed de novo. United States v. Evans, 478 F.3d 1332, 1341 (11th Cir.2007).

III. DISCUSSION

The mail fraud statute prohibits use of the mails in furtherance of "any scheme or artifice to defraud." 18 U.S.C. § 1341. "[T]he words `to defraud' commonly refer `to wronging one in his property rights by dishonest methods or schemes,' and `usually signify the deprivation of something of value by trick, deceit, chicane or overreaching.'" McNally v United States, 483 U.S. 350, 358, 107 S.Ct. 2875, 2881, 97 L.Ed.2d 292 (1987) (quoting Hammerschmidt v. United States, 265 U.S. 182, 188, 44 S.Ct. 511, 512, 68 L.Ed. 968 (1924)). "Read naturally, the word `any' has an expansive meaning, that is, `one or some indiscriminately of whatever kind.'" United States v. Gonzales, 520 U.S. 1, 5, 117 S.Ct. 1032, 1035, 137 L.Ed.2d 132 (1997) (quoting Webster's Third New International Dictionary 97 (1976)). Use of the word "any" without limiting language should be read to mean "all." See id.

The prohibition of "any scheme or artifice to defraud" derives from the original statute enacted in 1872 as part of a recodification of the postal laws. Act of June 8, 1872, ch. 335, § 301, 17 Stat. 323. "Congress intended from the beginning that the statute be given a very broad application and approved and fostered this broad application at every opportunity." Jed S. Rakoff, The Federal Mail Fraud Statute (Part I), 18 Duq. L.Rev. 771, 822 (1980). Congre...