No. 77-2050.United States Court of Appeals, District of Columbia Circuit.Argued June 21, 1978.
Decided October 22, 1979.
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Allan Abbot Tuttle, Washington, D.C. (appointed by this Court), for appellant.
Whitney M. Adams, Asst. U.S. Atty., Washington, D.C., with whom Earl J. Silbert, U.S. Atty., John A. Terry, Peter E. George, Brian W. Shaughnessy and Raymond Banoun, Asst. U.S. Attys., Washington, D.C., were on the brief, for appellee.
Appeal from the United States District Court for the District of Columbia (D.C. Criminal No. 77-00198).
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Before BAZELON, Senior Circuit Judge, and TUTTLE,[*] Senior Circuit Judge for the Fifth Circuit, and ROBB, Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge BAZELON.
Dissenting opinion filed by Circuit Judge ROBB.
BAZELON, Senior Circuit Judge:
[1] Appellant was convicted by a jury on all counts of a thirty-five count indictment charging violations of both federal and District of Columbia statutes. The offenses stemmed from a scheme in which appellant would be paid to have an accomplice delete adverse information from, and add fictitious favorable information to, the computerized credit files of individuals who had difficulty obtaining credit. The altered credit records would then be sent for approval to various lending institutions, ultimately allowing these individuals to purchase automobiles or other items. The indictment, which was based on only eight credit transactions, included one count of conspiracy,[1] twenty-five counts of mail[2] and wire[3] fraud (counts 2-21 and 22-26), three counts of false statements to a federally insured bank (counts 27-29),[4] and six counts of D.C. felony false pretenses (counts 30-35).[5] [2] Certain of the multiple convictions under both federal and local law are contrary to congressional intent, requiring vacation of two or four convictions. Furthermore, the mailings at issue here cannot sustain convictions under the mail fraud statute because they occurred after the scheme to defraud had reached fruition. Finally, we vacate the sentences imposed on counts 27 through 29 of the indictment because they exceed the statutory maximum, and we remand for resentencing in accordance with 18 U.S.C. § 1014 and this opinion.[6] The remainder of the judgment of the District Court is affirmed.[7] I. [3] MULTIPLE CONVICTIONS UNDER FEDERAL AND D.C. LAW
[4] Each fraudulent credit transaction gave rise to multiple charges against Alston. In one transaction, an altered credit application and an altered credit report were sent by teletype (counts 13 and 15, wire fraud) to a federally insured savings bank (count 27, federal false statements), the applicant obtained an automobile loan from the bank (count 34, D.C. false pretenses), and the bank notified the dealer about the loan by telephone (count 20, wire fraud). In a second transaction, an individual applied for a home improvement loan from a federally insured bank (count 28, federal false statements), the credit bureau telecopied an altered credit record to the bank (count 14,
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wire fraud), and the applicant obtained the loan (count 33, D.C. false pretenses). In four other transactions, applicants obtained automobile loans from a finance company (counts 30, 31, 32 and 35, D.C. false pretenses); in these transactions, wire fraud was charged for each time the automobile dealer telecopied a fraudulent application to the finance company (counts 2, 6, 9 and 11), the credit bureau telecopied an altered credit record to the lender (counts 3, 7, 10, 12 and 16), and the lender telephoned notice of loan approval to the dealer (counts 17, 18, 19 and 21). Mail fraud was charged each time the dealer mailed a completed sales contract to the lender (counts 22 through 26). Two remaining transactions, which involved unsuccessful attempts to obtain loans, triggered charges of federal false statements (count 29) and wire fraud (counts 4, 5, and 8).
[5] This case raises problems that flow from an overkill of charges against a defendant. Pyramiding charges is particularly troublesome in the District of Columbia, where local and federal offenses can be joined in one indictment pursuant to 11 D.C. Code § 502 (1973). [6] Appellant argues that the multiple convictions under federal and local law denied him equal protection of the laws. Subsequent to the submission of this case for decision, this court has clarified the method by which we will analyze challenges to convictions under both federal and local law when the acts complained of arise within essentially the same transaction.[8]As explained in United States v. Dorsey,[9] the court must determine whether Congress intended to authorize multiple punishments under the particular statutes in question, and if so, whether the multiple punishments are constitutional. Therefore, we first consider whether Congress intended to impose multiple punishments for a single fraudulent transaction that violates both the D.C. false pretenses statute and either the federal false statements statute or the federal mail and wire fraud statutes. Because of the similar purposes underlying the false pretenses and false statements statutes, we think that Congress did not intend multiple punishments in the circumstances presented here. On the other hand, we do discern a congressional intent to impose multiple punishments when an act or transaction violates both the false pretenses and the mail or wire fraud statutes.
A.
[7] The D.C. false pretenses statute, 22 D.C. Code § 1301 (1973), provides that “[w]hoever, by any false pretense, with intent to defraud, obtains from any person any service or anything of value,” shall be subjected to imprisonment for up to three years. The federal false statements statute, 18 U.S.C. § 1014 (1976), provides that “[w]hoever knowingly makes any false statement or report, . . . for the purpose of influencing in any way the action of . . . any [federally insured] bank” can be imprisoned for not more than two years.
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institution, (3) for the purpose of influencing the action of the institution.[11]
[9] On their face, the local and federal statutes address different interests. The local statute focuses on the loss of anything of value, regardless of the identity of the victim. The federal statute is designed to protect specific financial institutions from fraud “in connection with loans or other similar transactions.”[12] The federal offense is complete when the false statement is made; it does not require that the bank actually part with something of value.[13] [10] Yet some fraudulent loan applications might result in the grant of a loan, as occurred here,[14] resulting in separate criminal charges based on the same act or acts. In this case, proof of the federal false statements charge coincided with proof of the D.C. false pretenses charge, except for the element of obtaining the loan: the “false statement” knowingly made was a “fals representation” knowingly made; the “purpose of influencing the action” of the bank was the “intent to defraud” the bank to obtain a loan; and a bank having federally insured deposits was the “defrauded party” acting in reliance on the fraudulent application. Thus, in the context of this case the two counts allege essentially the same offense.[15] Moreover, the three year maximum sentence under the D.C. false pretenses statute — applicable when a loan is actually obtained — appears analogous to an enhancement of the two years maximum sentence under the federal false statements statute — applicable when a false statement is made in an attempt to obtain a loan. [11] “[U]nless the intent of Congress is stated ‘clearly and without ambiguity, doubt will be resolved against turning a single transaction into multiple offenses.'”[16] Since we find no such statement here, we apply “a corollary of the rule of lenity, an outgrowth of our reluctance to . . . multiply punishments absent a clear and definite legislative directive.” Simpson v. United States, 435 U.S. 6, 15-16, 98 S.Ct. 909, 914, 55 L.Ed.2d 70(1978). Accordingly, we direct vacation of the convictions under either counts 27 and 28 (false statements) or counts 33 and 34 (false pretenses) of the renumbered indictment, and appropriate resentencing of appellant.
B.
[12] We turn now to the multiple punishments under the federal mail or wire fraud statutes and the D.C. false pretenses statute. The mail[17] and wire[18] fraud statutes
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prescribe a penalty for each use[19] of the mails or wires “for the purpose of executing” a scheme to defraud or to obtain money or property by means of false pretenses. The focus of each statute is upon the misuse of the instrumentality of communication.[20] The interest to be protected under these federal statutes is clearly distinct from the property interest safeguarded by the local statute. Several courts have found that Congress intended to authorize multiple punishment under both the mail or wire fraud statute and other federal fraud statutes.[21] We conclude that Congress likewise intended violations of the mail or wire fraud statute to be separately punishable from violations of the local false pretenses statute.
[13] Under the analytical framework established in United States v. Dorsey, supra, we next consider a constitutional inquiry:[E]ven if Congress intends to punish a defendant twice for violating two statutory provisions, the double jeopardy clause may bar such multiple punishment at a single trial if the two statutory provisions constitute the “same offense” under Blockburger.[14] 591 F.2d at 942. [15] The statutes in question clearly define separate offenses. Conviction for mail or wire fraud requires proof of only two elements: (1) a scheme to defraud, and (2) use of the mails or wires for the purpose of executing the scheme.[22] Conviction for false pretenses requires proof of several additional elements, and does not require proof of use of the mails or wires.[23] Since each requires proof of a fact that the other does not, they are clearly not the “same offense” unde Blockburger. Thus, the double jeopardy clause does not prohibit multiple punishments under these statutes. [16] Appellant advances a second constitutional question in his claim that the multiple punishments denied him equal protection of the laws. This claim rests on an assumption that no defendant outside the District of Columbia would be subject to such double punishment because the Department of Justice’s Petite[24]
policy bars successive state-federal prosecutions for “the same act or acts.”[25] The Petite policy
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was announced in 1959 in direct response to the Supreme Court’s rulings that the Constitution does not prohibit state and federal governments from prosecuting a defendant for the same act.[26] As the Court recently explained in Rinaldi v. United States, 434 U.S. 22, 29, 98 S.Ct. 81, 85, 54 L.Ed.2d 207 (1977): “Although not constitutionally mandated, thi [Petite] policy serves to protect interests which, but for the `dual sovereignty’ principle inherent in our federal system, would be embraced by the Double Jeopardy Clause.”
[17] Although we recognize that the Petite policy is of long standing and strictly enforced,[27] we conclude that it provides no basis for a successful equal protection claim here.[28] The Petite policy is not law, but rather an executive policy that permits of exceptions in the Attorney General’s discretion.[29] The federal government remains free, under the Supreme Court’s ruling in Abbate v. United States, 359 U.S. 187, 79 S.Ct. 666, 3 L.Ed.2d 729 (1959), to bring a federal prosecution subsequent to a state prosecution. Furthermore, neither the Petite policy nor the Constitution serves as a bar to a state prosecution and sentence following a federal prosecution and sentence.[30] It is possible, therefore, that defendants outside the District could be punished for both federal and state offenses arising from the same act or transaction.[31]Page 538
II. [18] INTENT TO DEFRAUD
[19] Appellant also argues that the evidence did not establish the intent to defraud required for convictions under the federal mail and wire fraud statutes, and the local false pretenses statute. Conceding that the loan applications and credit records were falsified in order to allow the applicants to obtain credit, appellant nevertheless contends that there was no intent to defraud because the applicants intended to repay the loans and because retention of a security interest in the goods made the loans risk free.
Consequently, we cannot sanction a scheme whereby would-be borrowers fraudulently obtain loans that would not otherwise be available to them, regardless of whether they might have intended to repay so long as they were capable of doing so.
III. [22] USE OF THE MAILS
[23] Finally, appellant asserts that his convictions on the five counts of mail fraud (counts 22-26) cannot stand. Each count arises from the mailing of an installment sales contract to the lender by the automobile dealer. Appellant argues that, because these mailings occurred after each applicant had taken possession of an automobile, they occurred after the scheme to defraud had reached fruition and were not sufficiently connected to the fraud to fall within the scope of the statute. If appellant is correct, then the convictions are invalid. See United States v. Maze, 414 U.S. 395, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974).
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65 S.Ct. 148, 89 L.Ed. 88 (1944), the Supreme Court held that a scheme involving fraudulently obtained checks was completed once the checks were cashed. The Court reasoned that the defendants had intended to receive money, and that the money had been received “irrevocably” when they cashed the checks. Thus, when the payor banks mailed the checks to the drawee bank for collection, the mailings were not for the purpose of executing the scheme. See id. at 94, 65 S.Ct. 148. Similarly, in Parr v. United States, 363 U.S. 370, 80 S.Ct. 1171, 4 L.Ed.2d 1277 (1960), the defendants had obtained gasoline and other products and services by the unauthorized use of a credit card issued to their employer. The defendants were charged with mail fraud for having “caused” the sending of invoices to the employer and the sending of payments to the issuer. The Court held the convictions invalid on the ground that defendants’ scheme reached fruition when the goods and services were received, because “[i]t was immaterial to them, or to any consummation of the scheme, how the [oil company] would . . . collect” its payment. Id. at 393, 80 S.Ct. at 1184. Most recently, in United States v. Maze, supra, the Court ruled that mailings of credit card sales invoices by merchants to a bank, and by the bank to the credit card holder, could not support mail fraud convictions because the defendant, who had stolen the credit card, had irrevocably received the goods and services before the mailings occurred. Nor did the subsequent mailings constitute “`deliberate, planned use of the mails'” by the perpetrator to aid the continuation or concealment of the fraudulent scheme. 414 U.S. at 403, 94 S.Ct. at 650 (quotin United States v. Sampson, 371 U.S. 75, 80, 83 S.Ct. 173, 9 L.Ed.2d 136 (1962)). Thus, the mail fraud statute was inapplicable to the mailings.
[25] Appellant here argues that, since the object of the scheme was to obtain an automobile, it reached fruition once the car was driven off the dealer’s lot. The Government, on the other hand, contends that the object was to obtain credit and use of the ca over the loan period. Under this theory, the mailing of the conditional sales contract after the loan applicant had obtained credit approval and a car would be within the coverage of the statute. [26] We believe that the scheme to defraud reached fruition before the mailing of each conditional sales contract. The dealer’s mailing of the contract, which contained the terms of payment and an assignment of the contract to the lending institution, neither furthered the objective of the scheme (i. e., obtaining a loan for the applicant) nor served to conceal the fraudulent representations.[35] Although the signing of the installment contract may have been a contemplated step toward obtaining possession of the car, we believe the subsequent mailing was immaterial to the fraud perpetrated upon the lender by the borrower.[36] We therefore vacate the convictions on counts 22 through 26 on the grounds that the mailings were not “for the purpose of executing” the scheme to obtain loans.[37]Page 540
IV.
[27] For the foregoing reasons, we vacate the judgment of the District Court with respect to counts 22 through 29 and counts 33 and 34 of the indictment, and we remand for resentencing in accordance with 18 U.S.C. § 1014 and this opinion. The remainder of the judgment is affirmed.
The District Court imposed concurrent sentences of twenty months to five years on counts “1 through 29,” and eight months to two years on counts “30 through 32.” On counts “33 through 35,” the District Court imposed sentences of ten months to three years, concurrent with each other but consecutive to the sentences imposed on counts 1 through 32. Counts 27 through 29 of the renumbered indictment, however, are federal false statements charges carrying a maximum sentence of two years; thus, the imposed sentences of five years on these counts must be vacated.
192 U.S.App.D.C. 313, 591 F.2d 922 (1978).
(5th Cir.), cert. denied, 412 U.S. 929, 93 S.Ct. 2759, 37 L.Ed.2d 157 (1973).
152 U.S.App.D.C. 103, 469 F.2d 114, 126-27 (D.C. Cir. 1972); see United States v. Dorsey, supra note 8, at 930.
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, . . . 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 takes or receives therefrom, . . . or knowingly causes to be delivered by mail . . . any such matter or thing, shall be fined not more than $1,000 or imprisoned not more than five years, or both. [Emphasis added.]
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, . . . transmits or causes to be transmitted by means of wire, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined not more than $1,000 or imprisoned not more than five years, or both. [Emphasis added.]
121 U.S.App.D.C. 134, 348 F.2d 363, 366 (D.C. Cir. 1965), cert. denied, 389 U.S. 845, 88 S.Ct. 95, 19 L.Ed.2d 111 (1967).
175 U.S.App.D.C. 227, 534 F.2d 964, 971 (D.C. Cir. 1976), cert. denied, 429 U.S. 924, 97 S.Ct. 324, 50 L.Ed.2d 292 (1976).
For a recent critical discussion of the Petite policy, see
Note, The Problem of Double Jeopardy in Successive Federal-State Prosecutions: A Fifth Amendment Solution, 31 Stan.L.Rev. 477, 488-96 (1979).
at 31, 98 S.Ct. at 86 (quoting Solicitor General).
(D.C. Cir. 1978), rehearing en banc denied (Apr. 30, 1979) cert. granted, ___ U.S. ___, 100 S.Ct. 42, 62 L.Ed.2d 29
(1979). Statement of Bazelon, Circuit Judge, as to why he voted for rehearing en banc, slip op. at 7 n. 12.
The Supreme Court decisions in Abbate and Bartkus, supra
note 26, holding that both the federal and state governments may prosecute a defendant for the same act or acts, are grounded in principles of federalism: where the laws of two “sovereigns” are violated, each government may have a legitimate reason for exercising its power of criminal prosecution. But this underlying rationale is absent where a defendant is prosecuted for violating laws of both the United States and the District of Columbia, since the laws emanate from one sovereign. Moreover, the Supreme Court and this court have long recognized that multiple punishments for essentially the same acts are unwarranted except “in instances of particular enormity, or where the public safety demanded extraordinary rigor.” Fox v. Ohio, 46 U.S. (5 How.) 410, 434, 12 L.Ed. 213 (1847), quoted with approval in Rinaldi v. United States, supra note 27, 434 U.S. at 27-28, 98 S.Ct. 81 see United States v. Knight, supra note 16, 166 U.S.App.D.C. 21, 509 F.2d at 351. One may seriously question whether this case satisfies those criteria.
Former Attorney General Rogers, in announcing the Petite
policy, stated: “the mere existence of a power [to multiple punishments] . . . does not mean that it should necessarily be exercised.” U.S. Dep’t of Justice Press Release, supra note 25, at 2. Government prosecutors in the fifty states must show “compelling reasons” before federal punishments will be added to those of the state for the same act or acts. See note 2 supra. To the extent that this policy strikes a satisfactory balance between vindicating societal interests and avoiding unfairness to defendants, may it fairly be said that a similar policy is appropriate in the District of Columbia?
We believe it unnecessary to decide the exact point at which this scheme culminated, whether it be when the lender approved the loan or when the installment sales contract was signed. We only decide that the mailings at issue were too remote to be within the intended coverage of the mail fraud statute.
We also note that, under the Government’s theory, even the regular mailing of each installment payment could constitute a violation of the mail fraud statute. We decline to open the door to such a result, which would impose greater criminal penalties on those who repay loans than on those who intentionally default.
(1969); United States v. Knight, 166 U.S.App.D.C. 21, 509 F.2d 354, 359 (D.C. Cir. 1974); United States v. Canty,
152 U.S.App.D.C. 103, 469 F.2d 114, 126 n. 14 (D.C. Cir. 1972) United States v. Hooper, 139 U.S.App.D.C. 171, 432 F.2d 604, 605 n. 3 (D.C. Cir. 1970).