United States v. Laedeke
| Decision Date | 26 September 2016 |
| Docket Number | CR 16-33-BLG-SPW |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. RANDY SCOTT LAEDEKE, Defendant. |
| Court | U.S. District Court — District of Montana |
Before the Court is Defendant Randy Scott Laedeke's motion to dismiss this case for lack of jurisdiction and failure to state an offense. (Doc. 21). Laedeke argues that the United States' reliance on emails exchanged within Montana that traveled to an out-of-state server is too tenuous to establish federal jurisdiction in this matter. He also argues that the United States did not allege facts sufficient to establish a fraudulent scheme, and that because the emails were not an integral part of the scheme, no wire fraud exists. The United States filed its reply on September 13, 2016. (Doc. 25). The Court deems this matter appropriate for decision without oral argument. D. Mont. Local Rule 47.2(e).
Laedeke is an attorney in Billings, Montana. He was hired to represent the estate of W.N. in a wrongful death civil suit in 2008, after W.N. was killed in a car accident in 2005. In October 2008, Laedeke successfully settled W.N.'s case for $300,000. W.N. had various legal heirs including his wife, V.N., and his daughter, W.P.
In accordance with his contract with W.N.'s estate, Laedeke deducted $184,599 from the settlement amount for his fee and expenses related to the suit. Laedeke also distributed $49,903.90 to V.N. or to others on her behalf, which left $65,497.10 remaining to distribute to W.N.'s heirs. The United States alleges that sometime between October 15, 2008 and March 31, 2010, Laedeke embezzled the remaining funds and removed the entire $65,497.10 for personal expenses.
In January 2014, Laedeke emailed W.P. about a proposal for disbursing the settlement funds. In response, W.P. stated that she could not "consider anything until [Laedeke] provide[d] [her] with what [she] ha[d] been asking for the last 6 years," including "copies of receipts or a copy of the cancelled check from the bank for ALL expenses i.e., the investigator, max small (sic) etc.... ." Laedeke emailed her back and stated that he "was pretty sure [he] sent copies of the expense[s]" previously. He reiterated the expenses and explained "banks quitsending canceled checks back to account holders several years ago." He then stated, Although Laedeke and W.P. exchanged those emails in Montana, the emails traveled interstate to an email server in either New Jersey or New York.
On March 18, 2016, the grand jury indicted Laedeke on two counts of wire fraud. The Indictment charges that on January 15 and 16, 2014, Laedeke "devised a material scheme and artifice to obtain money by false and fraudulent pretenses, representations, and promises . . . and thereafter to execute the scheme so devised . . . by wire communication in interstate commerce[.]" Counts I and II allege that he "did knowingly cause to be transmitted in interstate commerce by means of wire communications an email from his email account . . . to the email account of W.P. which traveled interstate by routing through a server located in Hicksville, NY[]."
Federal Rule of Criminal Procedure 12(b) allows consideration at the pretrial stage of any defense "which is capable of determination without the trial of the general issue." United States v. Nukida, 8 F.3d 665, 669 (9th Cir. 1993). "On a motion to dismiss an indictment for failure to state an offense, the court must accept the truth of the allegations in the indictment in analyzing whether acognizable offense has been charged." United States v. Boren, 278 F.3d 911, 914 (9th Cir. 2002).
Counts I and II are based on the emails between Laedeke and W.P., both of whom were located in Billings when the emails were exchanged. Laedeke argues that he did not know the emails would travel out of state. He also argues that because the emails were sent intrastate, they cannot constitutionally provide a basis for jurisdiction under the wire fraud statute. He reasons that the incidental routing of intrastate communications through other states is too tenuous an interstate connection to be considered "interstate commerce" under the Constitution. He proposes that the location of the communicating parties and the de minimis character of the interstate travel should determine federal jurisdiction. The Court disagrees.
The starting point for the analysis is 18 U.S.C. § 1343, the wire fraud statute. It provides in relevant 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, 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.
18 U.S.C. § 1343 (emphasis added).
Here, the emails indisputably traveled by wire from Montana to New York and back to Montana. And wires are indisputably channels or instrumentalities of interstate commerce. United States v. Jinian, 725 F.3d 954, 968 (9th Cir. 2013). See also Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 271 (1964) (); United States v. Carnes, 309 F.3d 950, 954 (6th Cir.2002) (). Accordingly, Laedeke's charged conduct falls "within the extensive reach of the Commerce Clause," at least facially, under which Congress may (1) "regulate the use of the channels of interstate commerce," (2) "regulate and protect the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities," and (3) "regulate those activities having a substantial relation to interstate commerce." Jinian, 725 F.3d at 968 (quoting United States v. Lopez, 514 U.S. 549, 558-59 (1995) (citation omitted)). As a result, the Court has jurisdiction unless either of his arguments have merit. In the Court's view, they do not.
As an initial matter, the fact that Laedeke did not know the emails would travel out of state is irrelevant. Congress views the interstate requirement asdistinct from, and subject to a different rule than, the elements describing the substantive offense. Jinian, 725 F.3d at 956. Specifically, the statute's interstate requirement is jurisdictional only - "[i]f the wire employed is an interstate wire the requirements for federal jurisdiction are satisfied." Id. at 964 (internal citations and quotations omitted). In other words, the wire fraud statute's only mens rea requirement is a specific intent to defraud; a defendant does not need to know that he was sending an interstate wire for the United States to establish jurisdiction. Id at 964-65. So whether Laedeke knew the emails would travel out of Montana is neither here nor there; the fact that they did satisfies the jurisdictional element.
Laedeke also argues that the incidental routing of intrastate communications through other states is too tenuous an interstate connection to be considered interstate commerce under the Commerce Clause. He argues that the location of the communicating parties should govern in the case of de minimus interstate connection. The Court finds no legal support for this argument.
In construing criminal statutes, a court's "task is to give effect to the will of Congress, and where its will has been expressed in reasonably plain terms, that language must ordinarily be regarded as conclusive." Negonsott v. Samuels, 507 U.S. 99 (1993). As long as the statutory scheme is coherent and consistent, theregenerally is no need for a court to inquire beyond the plain language of the statute. United States v. Ron Pair Enterprises, Inc., 489 U.S 235, 240-41 (1989).
Here, the statutory language, "[t]ransmits . . . in interstate commerce" is not ambiguous. See United States v. Pezzino, 535 F.2d 483, 484 (9th Cir. 1976) (transmits is sending); Telephone News System, Inc. v. Illinois Bell Tel. Co., 220 F.Supp. 621, 638 (N.D. Ill. 1963) (same). The plain meaning encompasses the conduct in this case: sending an email that travels out of one state, into another, and back again. In fact, Laedeke has not claimed the statute is ambiguous.
Without providing any significant legal support, however, Laedeke assumes that Congress does not have the authority to punish his conduct because of its largely intrastate character. But the Supreme Court concluded long ago that "as Congress has power, when necessary for the protection of interstate commerce, to regulate intrastate transactions, there is no constitutional requirement that the scope of the statute be limited so as to exclude intrastate communications. . . as long as the instrumentality itself is an integral part of an interstate system." Weiss v. United States, 308 U.S. 321, 327 (1939); accord Gonzales v. Raich, 545 U.S. 1, 22 (2005) (); see also Heart of Atlanta Motel, Inc., 379 U.S. at 271 (). Laedeke cannot and does not contend that email correspondence is not an integral part of an interstate communication system.
It is also worth noting that Congress did not place any parameters on...
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