United States v. Thompson

• Decision Date: 03 March 2021
• Docket Number: No. 18-30208,No. 18-30206,18-30206
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Vassily Anthony THOMPSON, Defendant-Appellant. United States of America, Plaintiff-Appellee, v. Derrick John Fincher, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

990 F.3d 680

UNITED STATES of America, Plaintiff-Appellee,

v.Vassily Anthony THOMPSON, Defendant-Appellant.

United States of America, Plaintiff-Appellee,

v.Derrick John Fincher, Defendant-Appellant.

No. 18-30206

No. 18-30208

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 4, 2020 Seattle, Washington

Filed March 3, 2021

Stephen R. Hormel (argued), Hormel Law Office LLC, Spokane Valley, Washington; Nicolas Vernon Vieth (argued), Vieth Law Offices Chtd., Coeur d'Alene, Idaho; for Defendants-Appellants.

Joseph P. Derrig (argued) and Brian M. Donovan (argued), Assistant United States Attorneys; William D. Hyslop, United States Attorney; United States Attorney's Office, Spokane, Washington; for Plaintiff-Appellee.

Before: Andrew J. Kleinfeld, William A. Fletcher, and Johnnie B. Rawlinson, Circuit Judges.

KLEINFELD, Circuit Judge:

We address two issues, whether the indictment was in effect improperly amended, and whether the forfeitures as imposed were contrary to the recent Supreme Court decision in Honeycutt v. United States .¹ The first issue is a straightforward application of established authority, but the second requires us to work through a new problem for our court.

Three people, Vassily Anthony Thompson, Derrick John Fincher, and John Patrick Nixon, stole a great deal of money from several people and firms with a classic "advance pay" scheme. In this kind of swindle, the victim is persuaded to pay money to the swindler in order to receive a much larger sum. The Thompson-Fincher-Nixon version persuaded the victims that the swindlers had access to considerable capital that could be loaned to the victims, but the victims would have to advance cash for fees and expenses. There was no capital available for the prospective loans, and the swindlers stole the advances. In this type of "long con," the maxim "you cannot cheat an honest man," does not apply. One can. The "long con" in this case was perfected with extremely elaborate and complex business documents and escrows, lulling the victims into victimhood, and appearing, until the victims sought the promised loans or to get their money back, to be genuine.

Eventually, the swindlers were caught. Nixon pleaded guilty pursuant to a plea bargain, and Thompson and Fincher were convicted in a jury trial and sentenced. Thompson and Fincher appeal the convictions and the forfeiture provisions of their sentences. We have jurisdiction under 28 U.S.C. § 1291. We lay out more details below, insofar as they bear on the legal issues.

The Indictment

The superseding indictment under which the swindlers were convicted says in the title area that they were charged with conspiracy to commit wire fraud in violation of 18 U.S.C. §§ 1343 and 1349 and aggravated identity theft in violation of 18 U.S.C. § 1028A(a)(1). The identity theft charge was dropped and is not an issue in this appeal. The general allegations in the superseding indictment were that the three "worked with one another to offer false and fictitious loans to various parties in Idaho, Montana, and North Carolina." The loans and lines of credit would be offered after Thompson, Fincher, and Nixon "collected fees from these parties under the guise that the fees were being used to acquire the loans. No such loans or lines of credit existed."

The Idaho scheme promised a $6 million line of credit, but required a $160,000 advance fee to be sent to an escrow agent in Georgia, a law firm specializing in escrows. An email promised that the $160,000 would be disbursed to an imaginary bank if the imaginary loan were approved, or returned if the customer cancelled the escrow. Of course, the imaginary loan was not made available, and the $160,000 was not returned.

The Montana deal required a $300,000 advance fee, supplemented by another $1 million, to get a $60 million or $70 million line of credit. The fees were deposited in a trust account maintained by another attorney, but no line of credit was made available.

The North Carolina scheme asked for an $855,000 advance to secure a fictitious $10 million line of credit, with the advance to be deposited into the trust account of a third attorney's firm.

The swindlers dressed the entire scheme up with genuine-looking escrow agreements, a memorandum of understanding, claims that Bank of America, Barclay's Bank, JP Morgan, the Federal Export Import Bank, RBC Royal Bank, and Landes Capital Management were involved, and lengthy, complex, and apparently genuine documentation.

The indictment recites all these facts in considerably greater detail, and then under a heading, "Overt Acts," incorporates them by reference. It then alleges multiple counts of wire fraud under 18 U.S.C. §§ 1343 and 1349 for the wire communications used to dupe the victims out of their money. The indictment also gives notice of criminal forfeiture allegations under 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c) for property derived from proceeds traceable to the offenses or substitute property under 21 U.S.C. § 853(p). The jury was instructed on conspiracy to commit wire fraud and convicted Thompson and Fincher under 18 U.S. C. §§ 1343 and 1349.

Appellants argue that because the indictment charges their crimes as it would for an 18 U.S.C. § 371 conspiracy by including "Overt Acts," it should be treated as so charging. Thus, allowing the jury to convict them of an 18 U.S.C. § 1349 conspiracy in effect amended the indictment improperly. This objection was not raised in district court, but appellants argue that the improper amendment, effectively convicting them of something the grand jury did not charge, was plain error. This statutory distinction matters a great deal because a Section 371 conspiracy has a five year limit on the sentence, but a Section 1349 conspiracy has a twenty year limit. Thompson and Fincher were sentenced to 108 and 135 months (nine and over eleven years), respectively.

The indictment does indeed read, in many respects, as though it was drafted to charge a Section 371 conspiracy. It charges a conspiracy against the United States and alleges overt acts, which are necessary for a Section 371 conspiracy.² Relying on the rule that an indictment may not be broadened or altered to charge a different offense except by the grand jury itself,³ the appellants challenge their conviction for wire fraud under Section 1349. Appellants assert that they were in effect charged with the lesser Section 371 crimes, and that we should remand for resentencing under Section 371, which would reduce their maximum exposure to five years of imprisonment.

Appellants are correct on general principles, but mistaken regarding application of the principles to this case. The Fifth Amendment protected them from being convicted of a crime that the grand jury did not charge, and changes could not be made at trial charging them with a crime for which they were not indicted.⁴ But that did not happen.

The indictment says in the caption that the appellants were charged with wire fraud and conspiracy to commit wire fraud under 18 U.S.C. §§ 1343 and 1349. After setting out the basis of the charges, and unnecessarily stating overt acts, the indictment says that the alleged acts were "all in violation of 18 U.S.C. §§ 1343 and 1349." It never mentions 18 U.S.C. § 371. Appellants do not dispute that the indictment sets forth all the elements of Sections 1343 and 1349. They say only that it also sets forth all the elements of Section 371. Perhaps they could have been charged with and convicted of conspiracy against the United States under Section 371, but they were not. The language in the indictment that would have been necessary or appropriate for a Section 371 charge was surplusage with respect to what they actually were charged with and convicted of.⁵ There is no constructive amendment of the indictment here because the indictment alleged all the elements of Sections 1343 and 1349. Appellants were tried and convicted of the crime charged, and there was no reason to include in the jury instructions the surplusage relating to the Section 371 crime that was not charged.

Thompson and Fincher could not have been misled by the language in the indictment that would have been used in a Section 371 charge. The indictment said consistently in the caption and the operative language that the charges were for wire fraud under Sections 1343 and 1349, never mentioning Section 371.⁶ As the Supreme Court held in Miller ,

As long as the crime and the elements of the offense that sustain the conviction are fully and clearly set out in the indictment, the right to a grand jury is not normally violated by the fact that the indictment alleges more crimes or other means of committing the same crime. ... A part of the indictment unnecessary to and independent of the allegations of the offense proved may normally be treated as "a useless averment" that "may be ignored."⁷

This case falls squarely within Miller .

Forfeiture

Thompson and Fincher also challenge the forfeiture aspect of each of their sentences. This issue is considerably more difficult than the indictment issue discussed above because we must apply the teachings of a recent Supreme Court decision to distinct facts.

The district court found that the swindlers ultimately stole $160,000 in the Idaho fraud, $1,000,000 in the Montana fraud, and $855,000 in the North Carolina fraud, for a total of $2,015,000.

The $160,000 from the Idaho fraud went to one lawyer's trust account before being distributed into several accounts. At least one account, AEIO Youth, was owned by Thompson. AEIO Youth then issued Fincher checks totaling some thousands of dollars. The court said Fincher and Thompson jointly obtained all the fraud proceeds because it was a joint decision to have the money initially go into the attorney's trust account.

The $1,000,000 from the Montana fraud went to another attorney's trust account, directed by Thompson. There was no evidence that Fincher directed those proceeds. $196,500 was...