United States v. Laplante

• Decision Date: 08 May 2013
• Docket Number: No. 11–2392.,11–2392.
• Citation: 714 F.3d 641
• Parties: UNITED STATES, Appellee, v. Joan R. LaPLANTE, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

714 F.3d 641

UNITED STATES, Appellee,

v.Joan R. LaPLANTE, Defendant, Appellant.

No. 11–2392.

United States Court of Appeals, First Circuit.

May 8, 2013.

Mark E. Howard, with whom Howard & Ruoff, PLLC, was on brief, for appellant.

Seth R. Aframe, Assistant United States Attorney, with whom John P. Kacavas, United States Attorney, was on brief, for appellee.

Before THOMPSON, STAHL, and LIPEZ, Circuit Judges.

THOMPSON, Circuit Judge.

When Appellant Joan LaPlante's once-successful factoring business ran into serious financial trouble, she allegedly defrauded a number of lenders to obtain more money to help get her out of the mess. After a government investigation, indictment and five-day trial, a jury convicted LaPlante of mail fraud under 18 U.S.C. § 1341. LaPlante now appeals her conviction, challenging the district court's jury instructions on the elements of mail fraud and claiming ineffective assistance of counsel. Because neither argument prevails, we affirm.

BACKGROUND

A. The Scheme

We walk through the relevant facts in the light most favorable to the government. United States v. Hebshie, 549 F.3d 30, 32 (1st Cir.2008). Starting in 2000, LaPlante began running a company called JRL Funding Group (“JRL”). While the company engaged in marketing, consulting and asset liquidation, much of its business involved factoring. Factoring is a business arrangement whereby a company purchases an entity's accounts receivable at a discount and collects on those accounts. The company profits when it collects more than what it paid for them. To run a factoring business in the first instance, a company needs sufficient capital to purchase another entity's receivables even at the discounted rate. To finance JRL's purchases of receivables, LaPlante obtained loans from various companies and individuals. She used the money she borrowed for that purpose until January 2003.

In January 2003, faced with financial woes, LaPlante's business went under and her factoring business came to a screeching halt. Yet from January 2003 to February 2007, she continued to seek and obtain loans from individuals based upon her representation the money would be used for her factoring business (which no longer existed), borrowing anywhere from $25,000 to $550,000 from a given individual. With respect to each loan, LaPlante and the lender executed a loan agreement describing JRL as a factoring, marketing and consulting business, and providing the interest rate on the loan. Lenders could choose to either receive monthly interest payments or roll the interest back into the account. Regardless of the option lenders chose, LaPlante promised to repay either one half of the funds in their account within 90 days or all of the funds within 180 days of receiving a written request for such repayment. Each month, LaPlante mailed lenders an account statement reflecting the principal and the interest that had accumulated on their accounts to date. However, when it came time to repay certain lenders the principal and interest on their loans, LaPlante was repeatedly unable to deliver on her promise to do so. At one point, LaPlante estimated she owed lenders a total of one million dollars.

B. The Trial

LaPlante was indicted in March 2009 on one count of mail fraud in violation of 18 U.S.C. § 1341. She was charged with devising a scheme and artifice to defraud and to obtain money by means of false and fraudulent pretenses, representations and promises, by allegedly lying to lenders about her ability to repay the loans and about the fact that the loans would be used for her factoring business.

Trial began on February 15, 2011. As indicated by opening statements, the defense's main theory was that LaPlante did not intend to deceive any of the individual lenders. According to the defense, the lenders should have known by looking at the loan agreements they signed that their loans were not being used solely for the factoring side of the business, but for the consolidated business which included marketing and consulting services.

The government's case-in-chief told a starkly different story. The government's theory was that LaPlante knew her business had stopped actively factoring by January 2003, but she continued to seek and borrow money from individuals on the false representation that the money would be used for factoring. The government theorized that LaPlante was not using that money for factoring, but instead was using the money to repay other loan debts she owed.

To support its theory, the government presented evidence primarily through the testimony of a Federal Bureau of Investigation (“FBI”) forensic accountant and Attorney James Normand, who represented a victim lender in a civil suit against LaPlante, that LaPlante's company was not factoring during the relevant time period. The FBI accountant testified that she had reviewed JRL's financial records and concluded that only a few transactions related to factoring were executed after January 2003. Without going into detail about the complaint's allegations in the civil case, Attorney Normand testified on direct that the documentation LaPlante produced in connection with that case showed that JRL had not purchased any accounts receivable after January 2003. The government also introduced into evidence a taped interview of LaPlante by the New Hampshire Attorney General's Office, during which she admitted JRL was not engaged in factoring activities after January 2003.

Through the testimony of more than twelve individuals from whom LaPlante had borrowed money between January 2003 and February 2007, the government put forth evidence that LaPlante, as the sole person in charge of her business, lied to lenders about the viability of her business and lied that her company was actively engaged in factoring at the time. A number of witnesses testified that, from their conversations with LaPlante, they believed she sought loans from them for factoring specifically.

After the conclusion of the evidence and closing statements, the district court delivered its jury charge (more on the jury instructions to come). The jury returned a guilty verdict the same day. LaPlante was later sentenced to 46 months' imprisonment with three years of supervised release and ordered to make restitution in the amount of $881,662.57. She timely appealed.

DISCUSSION

A. Jury Instructions

On appeal, LaPlante argues two jury instruction related errors occurred below. Because, as LaPlante concedes, she failed to object to the jury instructions at trial, we review for plain error. United States v. Riccio, 529 F.3d 40, 46 (1st Cir.2008). To establish plain error, a defendant must show that (1) an error occurred, (2) the error was obvious, (3) the error affected substantial rights, and (4) the error “seriously impaired the fairness, integrity, or public reputation of judicial proceedings.” United States v. Vargas–De Jesus, 618 F.3d 59, 67 (1st Cir.2010) (internalquotation marks and citation omitted). LaPlante cannot satisfy the first prong of this test. Thus, our analysis starts and ends with that prong.

Title 18 United States Code Section 1341 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, ... for the purpose of executing such scheme or artifice or attempting so to do, 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 ... shall be fined under this title or imprisoned not more than 20 years, or both.”

18 U.S.C. § 1341. In charging the jury, the district court described the elements of mail fraud and explained that the jury's decision had to be unanimous as to whether the government had proven those elements. The district court instructed that mail fraud consists of three elements the government must prove beyond a reasonable doubt: (1) a scheme or artifice to defraud; (2) the defendant's knowing and willing participation in the scheme to defraud with the specific intent to defraud; and (3) the use of the mails in furtherance of the scheme. As to the first element, the district court explained that a scheme to defraud is “a plan to deprive another of money or property by trick, deceit, deception or swindle” and that the scheme must relate to a “material fact or matter.” The district court described a “material fact” as one that “has a natural tendency to influence or is capable of influencing the decision of the person to which it was addressed” and instructed the jury that if it were to “find a particular statement of fact was false, you must then determine whether that statement was one that a reasonable person [would] h[a]ve considered important in making his or her decision. The same principle applies to fraudulent half-truths or omissions of material facts.”

With respect to the second element, the court defined “knowingly” as “act[ing] voluntarily and deliberately, rather than mistakenly or inadvertently” and “willfully” as “act[ing] knowingly and purposefully with an intent to do something the law forbids[.]” The jury was instructed that “intent to defraud means to act willfully with a specific intent to deceive or cheat or for the purpose of either causing some financial loss to another or bringing about some financial gain to oneself.” The court further instructed that the question of whether the “defendant acted knowingly, willfully and with the intent to defraud is a question of fact for [the jury] to resolve” and goes to the “defendant's state of mind.” Direct proof of intent, the court explained, is not required; intent may be “established by circumstantial evidence.”

Moving on to the third element, the court instructed the jury...