U.S. v. Williams, 05-30071.

• Decision Date: 21 March 2006
• Docket Number: No. 05-30071.,05-30071.
• Citation: 441 F.3d 716
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. John Anthony WILLIAMS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

441 F.3d 716

UNITED STATES of America, Plaintiff-Appellee, v. John Anthony WILLIAMS, Defendant-Appellant.

No. 05-30071.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted January 12, 2006.

Filed March 21, 2006.

COPYRIGHT MATERIAL OMITTED

Ruben L. Iniguez, Assistant Federal Public Defender, Portland, OR, for the defendant-appellant.

Christopher L. Cardani, Assistant United States Attorney, Eugene, OR, for the plaintiff-appellee.

Appeal from the United States District Court for the District of Oregon; Michael R. Hogan, District Judge, Presiding. D.C. No. CR-03-60104-HO.

Before DIARMUID F. O'SCANNLAIN, ANDREW J. KLEINFELD, and SUSAN P. GRABER, Circuit Judges.

GRABER, Circuit Judge.

Defendant John Anthony Williams appeals his conviction and sentence for mail and wire fraud and money laundering. His main argument is that the government improperly charged him under an "intangible rights" theory of mail and wire fraud, because that theory does not apply to private individuals, and that the absence of a special verdict makes it impossible to determine whether the jury found "direct" fraud or "intangible rights" fraud. Since Congress passed 18 U.S.C. § 1346, we have not addressed directly whether the "intangible rights" theory applies to private-sector fraud. We hold that, under 18 U.S.C. §§ 1341 and 1343, the "intangible rights" theory applies to private-sector fraud, at least where (as here) the defendant has a fiduciary duty to the victim. Because the government correctly charged Defendant under both an "intangible rights" and a "direct" theory of fraud, the general verdict stands.

Defendant also challenges his conviction and sentence on four other grounds: (1) 18 U.S.C. § 1346 is unconstitutionally vague as applied because Defendant would not reasonably expect it to apply to a private individual; (2) Count 12, charging Defendant with foreign transportation of stolen money, failed to state an offense because Defendant did not personally transport the money in question to Belize; (3) the district court violated the Ex Post Facto Clause and Defendant's due process rights by sentencing him pursuant to United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), when the jury rendered its verdict before the Supreme Court decided Booker; and (4) the district court erred by finding the facts underlying a "vulnerable victim" sentencing enhancement. In response to those arguments, we hold: (1) 18 U.S.C. § 1346 is not unconstitutionally vague as applied because a person of ordinary intelligence would know that it is a crime for a licensed financial planner to cause his client to sign a power of attorney in his favor and then, by using the mail and wires, employ the power of attorney to steal hundreds of thousands of dollars from the client; (2) Count 12 stated an offense because it is sufficient for the defendant to have caused the transportation of stolen money to a foreign country; (3) United States v. Dupas, 419 F.3d 916 (9th Cir.2005), has resolved Defendant's Booker arguments against him; and (4) the district court did not clearly err by finding that the victim, who was 87 years old, financially inexperienced, and suffering from the loss of a close family member, was vulnerable. Accordingly, we affirm the conviction and the sentence in all respects.

FACTUAL AND PROCEDURAL BACKGROUND

From 1993 to 2003, Defendant John Anthony Williams worked as a self-employed insurance seller and licensed financial planner. In 1998, Oregon financial services company Waddell & Reed hired Defendant as a commissioned sales agent. That year, he sold an $88,000 annuity to victim Loyd Stubbs. Later in 1998, Stubbs inherited $92,000 as the beneficiary of his brother Verlin's life insurance policy. Stubbs and Verlin had been partners in a sheep ranch. Verlin managed the finances and Stubbs, who had only an eighth-grade education, provided the labor. The two brothers were close. Stubbs was 87 years old when Verlin died. Defendant advised Stubbs to consolidate all of his financial holdings, totaling approximately $198,000, into one account, which he did. The bank then transferred the account to Waddell & Reed.

In 1999, Stubbs bought another $437,960.21 in annuities through Defendant. In July 1999, at Defendant's instruction, Stubbs signed a durable power of attorney naming Defendant as his agent. On the same day, and without Stubbs' knowledge, Defendant opened a private mailbox in Stubbs' name. The next day, by means of the power of attorney, Defendant opened a joint bank account in the names of Stubbs and Defendant. He also presented Stubbs with surrender forms for three of Stubbs' annuities. Defendant used the surrender forms to liquidate Stubbs' annuities and deposited the resulting funds in the joint bank account.

Soon thereafter, Defendant spent $35,000 of Stubbs' money on Defendant's personal expenses. In August 1999, Defendant wrote two checks from the joint bank account to "Cash," one for $300,000 and the other for $70,000. Defendant deposited the cash in his personal bank account.

Defendant then opened a bank account with the Bank of Belize and started a shell corporation in Belize. Defendant wiretransferred Stubbs' money from Defendant's personal account to his accounts in Belize and in Baton Rouge, Louisiana.

Defendant and his wife moved to Belize and used Stubbs' money to buy a condominium. In 2000, Defendant returned to Oregon and wire-transferred $80,000 from the Belize account back to his personal account in Oregon.

Thereafter, the grand jury in Oregon issued an indictment against Defendant, charging him with four counts of wire fraud in violation of 18 U.S.C. §§ 1343 and 2, three counts of mail fraud in violation of 18 U.S.C. § 1341, two counts of money laundering in violation of 18 U.S.C. §§ 1956(a)(1)(B)(i) and 2, and two counts of money laundering in violation of 18 U.S.C. §§ 1957 and 2. In a superseding indictment, the government added one count of foreign transportation of stolen money in violation of 18 U.S.C. §§ 2314 and 2, and amended each of the mail and wire fraud charges to include references to 18 U.S.C. § 1346.

After a three-day trial, a jury convicted Defendant of all charges except one count of money laundering. The district court sentenced Defendant to 51 months in prison plus three years of supervised release. It also ordered Defendant to pay $450,223.82 in restitution and a $1,100 special assessment. At sentencing, the court found that Stubbs qualified as a "vulnerable victim" and applied an enhancement to the advisory Guidelines sentence. Defendant now brings this timely appeal.

DISCUSSION

A. Defendant's conviction under the "intangible rights" theory embodied in 18 U.S.C. § 1346

1. The "intangible rights" theory can apply in a private commercial setting.

In the original indictment, the government charged Defendant with mail and wire fraud in violation of 18 U.S.C. §§ 1341 and 1343, respectively. Section 1341 provides in part:

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises . . ., places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both.

Section 1343 states, as relevant:

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both.

Both sections codify a "direct" theory of fraud in which the object of the fraudulent scheme is to obtain money or other tangible property.

The superseding indictment added a reference to 18 U.S.C. § 1346 in each of the seven fraud counts. Section 1346 states:

For the purposes of this chapter, the term "scheme or artifice to defraud" includes a scheme or artifice to deprive another of the intangible right of honest services.

Section 1346 thus codifies an "intangible rights" theory of fraud. Under this theory, the object of the fraudulent scheme is the victim's intangible right to receive honest services.

The government charged Defendant under both fraud theories in the alternative. The jury returned a general verdict of guilty on all seven fraud counts. Neither party requested a special verdict form, so the jury did not specify the theory of fraud on which it relied, nor did it specify whether it reached unanimity on either or both of the two theories.

Defendant argues that the "intangible rights" theory of fraud does not apply to private individuals. Therefore, he argues in the absence of a special verdict confirming that the jury found him guilty of violating 18 U.S.C. §§ 1341 and 1343 through "direct" fraud, his fraud convictions must be vacated under the principles announced in Yates v. United States, 354 U.S. 298, 312, 77 S.Ct. 1064, 1 L.Ed.2d 1356 (1957), overruled in part on other grounds by Burks v. United States, 437 U.S. 1, 98 S.Ct. 2141, 57 L.Ed.2d 1 (1978).

Yates involved a single-count federal indictment against the defendants, which charged them with conspiracy "(1)...