corporate records to secure funds used to make an illegal corporate campaign contribution. Sun-Diamond asserts that the court should enter a judgment of acquittal on counts III and IV, because there was no evidence which established that Mr. Douglas intended to defraud Robinson-Lake or Bozell.
In order to sustain the convictions for wire fraud,
the Government needs only establish two elements beyond a reasonable doubt: (1) that the defendant engaged in a scheme to defraud or aided and abetted in this pursuit;
and (2) that the defendant used a wire for the purpose of executing the scheme or aided and abetted in the use of a wire for the purpose of executing the scheme.
Pereira v. United States, 347 U.S. 1, 8, 98 L. Ed. 435, 74 S. Ct. 358 (1954); United States v. Pollack, 175 U.S. App. D.C. 227, 534 F.2d 964, 971 (D.C.Cir. 1976), cert. denied, 429 U.S. 924, 50 L. Ed. 2d 292, 97 S. Ct. 324 (1976); United States v. Alston, 197 U.S. App. D.C. 276, 609 F.2d 531, 536 (D.C.Cir. 1979); United States v. Lemire, 232 U.S. App. D.C. 100, 720 F.2d 1327, 1334-35 (D.C.Cir. 1983). The wire fraud statute does not require that the scheme to defraud be ultimately successful or that the intended victim suffer injury. Pollack, 534 F.2d at 971 (stating that "success of the scheme and loss by a defrauded person are not essential elements ... under Section 1343."); see also United States v. Gross, 416 F.2d 1205 (8th Cir. 1969), cert. denied, 397 U.S. 1013, 25 L. Ed. 2d 427, 90 S. Ct. 1245 (1970); Deaver v. United States, 81 U.S. App. D.C. 148, 155 F.2d 740 (D.C.Cir. 1946), cert. denied, 329 U.S. 766, 91 L. Ed. 659, 67 S. Ct. 121 (1946).
The scheme to defraud must, however, "threaten some cognizable harm to its target, that harm need not be deprivation of tangible property or money; criminal fraud encompasses schemes to defraud persons of intangibles as well." Lemire, 720 F.2d at 1336; United States v. Von Barta, 635 F.2d 999, 1006 (2d Cir.), cert. denied, 450 U.S. 998, 68 L. Ed. 2d 199, 101 S. Ct. 1703 (1981); United States v. Bohonus, 628 F.2d 1167 (9th Cir. 1980); United States v. Condolon ; 600 F.2d 7, 9 (4th Cir. 1979); United States v. Louderman, 576 F.2d 1383 (9th Cir.), cert. denied, 439 U.S. 896, 58 L. Ed. 2d 243, 99 S. Ct. 257 (1978). As to the deprivation of honest services, see note 14, the Government needs only establish that Mr. Douglas could have anticipated that the scheme posed an "independent business risk to" Mr. Lake's corporate employer. 720 F.2d at 1337;
see also Von Barta, 635 F.2d at 1005-06 n. 14 ("Government need not show that the scheme's victims were in fact defrauded ... [only] that some actual harm or injury was at least contemplated."); United States v. Dixon, 536 F.2d 1388, 1400-01 (2d Cir. 1976).
The evidence in this case, viewed most favorably to the Government, suffices to sustain the wire fraud convictions. The evidence must be viewed in its totality, "since one fact may gain color from others." United States v. Tramunti, 500 F.2d 1334, 1338 (2d Cir.), cert. denied, 419 U.S. 1079, 42 L. Ed. 2d 673, 95 S. Ct. 667 (1974). The Government established that Sun-Diamond, through Mr. Douglas, engaged a scheme or artifice to defraud Mr. Lake's corporate employer of money and the right to the honest services of Mr. Lake. In addition, the Government established that Mr. Douglas used a wire in furtherance of the scheme.
Wire fraud is a specific intent offense. Von Barta, 635 F.2d at 1005 n. 14; Bohonus, 628 F.2d at 1172; United States v. Keane, 522 F.2d 534, 544 (7th Cir. 1975), cert. denied, 424 U.S. 976, 47 L. Ed. 2d 746, 96 S. Ct. 1481 (1976). In order to establish specific intent, the Government needed to prove only that the scheme was "reasonably calculated to deceive persons of ordinary prudence and comprehension." Irwin v. United States, 338 F.2d 770, 773 (9th Cir. 1964), cert. denied, 381 U.S. 911, 14 L. Ed. 2d 433, 85 S. Ct. 1530 (1965); Bohomus, 628 F.2d at 1172. "The requisite intent ... may be inferred from the totality of the circumstances and need not be proven by direct evidence." United States v. Alston, 197 U.S. App. D.C. 276, 609 F.2d 531, 538 (D.C. Cir. 1979), cert. denied, 445 U.S. 918, 63 L. Ed. 2d 603, 100 S. Ct. 1281 (1980); United States v. Sawyer, 85 F.3d 713, 733 (1st Cir. 1996) (stating that "specific intent to deceive may be proven (and usually is) by indirect and circumstantial evidence); United States v. O'Brien, 14 F.2d 703, 706 (1st Cir. 1994) (observing that fraud crimes "by their very nature, often yield little in the way of direct proof."); United States v. Nivica, 887 F.2d 1110, 1113 (1st Cir. 1989) (stating that "factual circumstances may signal fraudulent intent in ways as diverse as the manifestations of fraud itself.), cert. denied, 494 U.S. 1005, 108 L. Ed. 2d 477, 110 S. Ct. 1300 (1990). Intent is demonstrated by evaluating the scheme itself. United States v. Reid, 175 U.S. App. D.C. 120, 533 F.2d 1255, 1261 (D.C. Cir. 1976). There must be a recognizable scheme formed with the intent to defraud. Post v. United States, 132 U.S. App. D.C. 189, 407 F.2d 319, 329 (D.C. Cir. 1968), cert. denied, 393 U.S. 1092 (1969).
In this case, the jury permissibly concluded that Mr. Douglas, in conjunction with Mr. Lake, possessed the intent to defraud Mr. Lake's corporate employer of $ 5,000 and its right to the honest services of Mr. Lake. Mr. Douglas and Mr. Lake engaged in a scheme whereby they secured illegal campaign contributions to help retire Henry Espy's campaign debt. They furthered this scheme by, inter alia, creating false expense reports seeking reimbursement from Mr. Lake's employer of money purportedly expended by Mr. Lake for the benefit of Sun-Diamond. "There can be no serious dispute that the creation of false and fraudulent corporate documents by a corporate officer to conceal payments from the corporate treasury of monies expended for non-existent [purposes], is a fraud on the corporation." United States v. Weiss, 579 F. Supp. 1224, 1242 (S.D.N.Y. 1983), aff'd, 752 F.2d 777 (2d Cir. 1985). Moreover, in order to execute the scheme, Mr. Douglas and Mr. Lake caused Robinson-Lake to advance the funds for the purpose of concealing the illegal campaign contribution by Sun-Diamond to Henry Espy.
The fact that Mr. Lake's employer was ultimately reimbursed does not negate the fact that it was forced, through artifice, to advance funds used for an illegal purpose. Mr. Douglas and Mr. Lake perpetrated the fraud when they unlawfully extracted the funds from Mr. Lake's corporate employer. Additionally, Mr. Douglas could certainly anticipate the identifiable, concrete harm Mr. Lake's conduct, engaged in at the direction of Mr. Douglas, would have on Robinson-Lake. Robinson-Lake is a public relations firm; an enterprise founded on the credibility and legitimacy of its practitioners. Mr. Douglas could certainly foresee the concrete damage Mr. Lake's illegal conduct could inflict upon Robinson-Lake, and as a consequence, on Bozell.
As set forth above, the second required element of wire fraud is the use of a wire for the purpose of executing the scheme to defraud. The Government introduced sufficient evidence pursuant to which the jury could have reasonably concluded that Mr. Douglas' fraudulent interstate wire communication "occurred prior to the fruition of and [bore] a sufficient connection to the realization of the scheme to be considered as made for the purpose of executing the scheme." Pollack, 534 F.2d at 971. Specifically, the Government introduced evidence, in the form of Mr. Douglas' expense report, which established that during the period of time when he called Mr. Lake in Dallas or Washington, D.C., he was in California. Thus, contrary to Sun-Diamond's position, there was sufficient evidence for the jury to conclude that Mr. Douglas engaged in an interstate communication. Although Mr. Douglas was unable to reach Mr. Lake, he left a message for the latter to return his telephone call. Mr. Lake did. At that point, Mr. Douglas and Mr. Lake engaged in a conversation in which they discussed the illegal scheme. Mr. Douglas informed Mr. Lake of Secretary Espy's desire to secure campaign contributions for his brother. Mr. Douglas proceeded to discuss with Mr. Lake the illegal manner in which they could achieve this end. The original communication was therefore instrumental in precipitating and thus furthering the illegal scheme.
For the reasons set forth above, it is this 12 day of May 1997,
ORDERED that Sun-Diamond's Motion for Judgment of Acquittal on Counts III Through IX of the Indictment be and is hereby DENIED.
Ricardo M. Urbina
United States District Judge