U.S. v. Trammell, 97-3045

• Citation: 133 F.3d 1343
• Decision Date: 12 January 1998
• Docket Number: No. 97-3045,97-3045
• Parties: 98 CJ C.A.R. 627 UNITED STATES of America, Plaintiff-Appellee, v. Michael W. TRAMMELL, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

Page 1343

133 F.3d 1343

98 CJ C.A.R. 627

UNITED STATES of America, Plaintiff-Appellee, v. Michael W. TRAMMELL, Defendant-Appellant.

No. 97-3045.

United States Court of Appeals, Tenth Circuit.

Jan. 12, 1998.

Steven K. Gradert, Assistant Federal Public Defender (David J. Phillips, Federal Public Defender, with him on the brief), Wichita, KS, for the appellant.

Stephen K. Lester, Assistant United States Attorney (Jackie N. Williams, United States Attorney, and Richard L. Schodorf, Assistant United States Attorney, with him on the brief), Wichita, KS, for the appellee.

Before TACHA, McKAY, and BRISCOE, Circuit Judges.

BRISCOE, Circuit Judge.

Michael W. Trammell appeals his convictions for two counts of mail fraud, in violation of 18 U.S.C. § 1341, one count of wire fraud, in violation of 18 U.S.C. § 1343, and two counts of money laundering, in violation of 18 U.S.C. § 1957. He also challenges the district court's enhancement of his sentence for abusing a position of trust pursuant to U.S.S.G. § 3B1.3. We exercise jurisdiction under 28 U.S.C. § 1291, and affirm his convictions and his sentence.

I.

This case involves Trammell's misappropriation of investors' funds. Trammell, a licensed insurance agent who operated under the corporate name of Senior Insurance Strategies, Inc., solicited funds from investors under the guise of selling annuities issued by American Investors Life Insurance Company, Inc., and Financial Benefit Life Insurance Company. In reality, Trammell used all but $100,000 of the funds for unrelated personal and business expenses. His contract with American Investors required that he instruct investors to make checks payable directly to the insurance company instead of to the agent or the agent's company. American Investors terminated its contract with Trammell on February 7, 1991, because he failed to follow this policy. Trammell then entered into an agent agreement with Financial Benefit on March 6, 1991. This agreement also required that Trammell instruct investors to make checks payable directly to the company.

On December 14, 1990, Leslie Oberhelman gave Trammell three checks payable to Senior Insurance Strategies, totaling $200,000, for American Investors annuities. Trammell forwarded Oberhelman's completed annuity applications to American Investors, but did not include the associated $200,000 premium. American Investors wrote to Trammell on three occasions asking him to forward the funds so that the annuity applications could be processed. Finally, on January 30, 1991, American Investors wrote a letter to Oberhelman's daughter, the proposed annuitant, informing her premiums had not been received and the company was closing its file.

On March 19, 1991, after his termination from American Investors, Trammell sent two annuity applications for Oberhelman to Financial Benefit. On March 29, Larry Sawyer, an employee of Senior Insurance Strategies, sent two applications to Oberhelman's daughter for her signature. Sawyer told Oberhelman that $150,000 of Oberhelman's money was being used to purchase annuities from Financial Benefit, when in fact, as the government's financial analyst demonstrated at trial, Trammell had spent all of Oberhelman's money by February 5, 1991. Trammell eventually purchased a $100,000 annuity for Oberhelman from Financial Benefit by wiring money from another investor's account. American Investors later settled a civil lawsuit with Oberhelman for $100,000.

On February 15, 1991, Carl and Dixie McWhorter gave Trammell a check for $17,325, and on April 8, 1991, they gave him an additional check for $32,514.50. Trammell told the McWhorters to make the checks payable to Senior Insurance Strategies. These checks were to be used to purchase a $60,000 annuity. Sawyer wrote to the McWhorters' daughter on April 9, 1991, asking for additional information and that she sign the annuity application. Trammell forwarded the completed application to Financial Benefit, but sent no money. In fact, as the government's financial analyst demonstrated at trial, Trammell had spent nearly all of the funds from the first check by February 28, 1991, and nearly all of the funds from the second check by May 1, 1991. The McWhorters never received an annuity and settled a civil lawsuit with Financial Benefit for $30,000.

Marcella Storey gave Trammell a check for $139,661.42 on June 3, 1991, to purchase an annuity from Financial Benefit. Trammell deposited the check in a Lawrence, Kansas, bank and, on June 7, 1991, he wired $100,000 of the funds to Financial Benefit for Oberhelman's annuity. Trammell forwarded an application for a $118,918.84 annuity to Financial Benefit for Storey, but did not send the required premium. The government's financial analyst demonstrated at trial that Trammell had spent all of Storey's money by June 17, 1991. In July, Storey received a $22,500 annuity issued by Presidential Life Insurance Company. Storey filed a civil lawsuit against Trammell, Senior Insurance Strategies, and Financial Benefit and settled with Financial Benefit for $58,000.

Trammell was indicted in Kansas state court on December 6, 1991, for three counts of failing to pay insurance premiums by an insurance agent, in violation of Kan. Stat. Ann. § 40-247. Joseph Kisner, supervised by Richard Schodorf, prosecuted the case for the state. On March 25, 1992, after a jury was impaneled and an opening statement was presented by the prosecutor, the district court granted Trammell's motion for judgment of acquittal based on an ambiguity in the statute. Specifically, the court found § 40-247, which punishes an insurance agent for failing to pay a premium after negotiating or renewing a "contract of insurance," does not cover an agent who fails to pay a premium after negotiating or renewing a contract for an annuity. The state appealed under Kan. Stat. Ann. § 22-3602(b)(1) and (3), and the Kansas Supreme Court limited the appeal to a question reserved under § 22-3602(b)(3). While the appeal was pending, the Kansas legislature amended Kan. Stat. Ann. § 40-247 to include contracts for annuities. After the legislature amended the statute, the court dismissed the appeal pursuant to State v. Hodges, 241 Kan. 183, 734 P.2d 1161 (1987), as the court's answer to the reserved question was no longer of statewide interest or vital to uniform administration of the criminal law.

On January 18, 1996, Trammell was indicted in federal court and Richard Schodorf, then an Assistant United States Attorney, represented the government. Trammell was convicted of two counts of mail fraud, one count of wire fraud, and two counts of money laundering. He was sentenced to forty-one months' imprisonment and three years' supervised release. In addition, he was ordered to pay $282,661.42 in restitution.

II.

Trammell argues his convictions should be reversed because (1) his federal prosecution violated the Double Jeopardy Clause; (2) his due process rights were violated by preindictment delay; (3) there was insufficient evidence to sustain his convictions for mail fraud and wire fraud; (4) there was insufficient evidence to establish federal jurisdiction over the money laundering charges; and (5) the district court failed to use a special verdict form. In addition, Trammell argues his sentence should not have been enhanced pursuant to U.S.S.G. § 3B1.3 for abuse of a position of trust.

Double Jeopardy

Trammell contends his federal prosecution was barred by the Double Jeopardy Clause because he was previously prosecuted and acquitted in state court. A defendant bears the burden of proving double jeopardy. United States v. Rodriguez-Aguirre, 73 F.3d 1023, 1025 (10th Cir.1996). This court reviews a district court's factual findings underlying a double jeopardy claim for clear error. Id. at 1024-25. However, we review de novo the court's legal determination regarding double jeopardy. Id. at 1025.

The Double Jeopardy Clause of the Fifth Amendment states "no person ... shall ... be subject to the same offense to be twice put in jeopardy of life or limb." U.S. Const. amend. V. It is well established that "prosecutions undertaken by separate sovereign governments, no matter how similar they may be in character, do not raise the specter of double jeopardy as that constitutional doctrine is commonly understood." United States v. Guzman, 85 F.3d 823, 826 (1st Cir.), cert. denied, --- U.S. ----, 117 S.Ct. 537, 136 L.Ed.2d 422 (1996). The dual sovereignty doctrine rests upon the notion that "laws of separate sovereigns are indeed separate and that one act may violate the laws of each; accordingly, prosecution by each cannot be for the same offense." United States v. Raymer, 941 F.2d 1031, 1037 (10th Cir.1991).

Despite the general dual sovereignty rule, there is a limited exception commonly referred to as the "sham prosecution" exception. See Bartkus v. Illinois, 359 U.S. 121, 123-24, 79 S.Ct. 676, 678-79, 3 L.Ed.2d 684 (1959). In Bartkus, the court rejected a double jeopardy claim, noting:

[The record did] not support the claim that the State of Illinois in bringing its prosecution was merely a tool of the federal authorities, who thereby avoided the prohibition of the Fifth Amendment against a retrial of a federal prosecution after an acquittal. [The record also] does not sustain a conclusion that the state prosecution was a sham and a cover for a federal prosecution, and thereby in essential fact another federal prosecution.

Id. The implication from this statement is that when one sovereign is acting as "merely a tool" of the other, and the second prosecution is merely a "sham and cover" for a previously unsuccessful prosecution, the second prosecution violates the Double Jeopardy Clause. Although frequently noted, this exception is "an extremely narrow one" and is rarely applied. United States v. Paiz, 905 F.2d 1014, 1024 (7th Cir.1990); see also United States v. Rector, 111 F.3d 503, 507 (7th Cir.1997) (noting the exception "has been...