Unpublished Disposition, 859 F.2d 155 (9th Cir. 1988)

No. 87-1111.

United States Court of Appeals, Ninth Circuit.

Before CHAMBERS, DAVID R. THOMPSON and JOHN M. WISDOM,^*  Circuit Judges.

MEMORANDUM^** 

Appellant John Jansen appeals his convictions after jury trial on two counts of mail fraud and one count of wire fraud, in violation of 18 U.S.C. §§ 1341, 1343. We affirm the convictions.

FACTS

Gail and Joseph Jolcover owned a carpet cleaning business in Phoenix which they wished to sell. Appellant, who owned a brokerage business in Chicago, learned of the Jolcovers' interest in selling their business and became their listing agent. He arranged with them to have Jack and Mary Lucas, Chicago residents, inspect the business in Phoenix as potential buyers. Before leaving for Phoenix, the Lucases deposited $17,500.00 "earnest money" in Jansen's Chicago bank account at Continental Bank.

After inspecting the carpet cleaning operation in the company of Jansen's associate, Wever,¹  the Lucases made an offer of $155,000.00 which the Jolcovers accepted. The sales agreement provided for a broker's commission of 12% of the gross sales price or $18,600.

The Lucases brought no checks with them to Phoenix. Jansen, who had flown to Phoenix to oversee escrow closing negotiations, volunteered to write a down payment check to the Jolcovers for $23,876.00 in exchange for the Lucases promissory note to Jansen in the same amount. The Jolcovers deposited Jansen's check in their account at Western Security Bank in Phoenix the day after they received it. Western Security forwarded the check to Jansen's bank in Chicago, for collection.

The Lucases paid Jansen the balance due on the $23,876.00, after they returned to Chicago. Jansen placed a stop payment order on his check to the Jolcovers which caused the check to be dishonored and returned unpaid to Western Security Bank. Jansen wrote and mailed to the Jolcovers a letter explaining the stop payment action stating they owed him an additional 10% in broker's fees and other miscellaneous costs totaling $23,427.00. Jansen also telephoned from Chicago the Jolcovers in Phoenix after they had received the stop payment notice and reaffirmed his intention not to pay them. Prior to trial in this criminal matter, the Jolcovers were paid $23,876.00 in settlement of their civil suit against Jansen and his bank.

DISCUSSION

Jansen first contends the district court abused its discretion by prohibiting his cross-examination of Jolcover on a provision of the civil settlement agreement which states the settlement is "a compromise and settlement of doubtful and disputed claims." The district court's decision to limit the scope and extent of cross-examination is reviewed for an abuse of discretion. Guillory v. County of Orange, 731 F.2d 1379, 1383 (9th Cir. 1984).

Jansen acknowledges that Rule 408 of the Federal Rules of Evidence prohibits evidence of compromise to prove liability of a claim. He argues, however, that Jolcover's acknowledgment that the claim was "doubtful and disputed" would impeach Jolcover's testimony that he had been defrauded and would support Jansen's claim he lacked the specific intent to defraud.

Although Fed.R.Evid. 408 permits evidence of compromise to prove bias or prejudice of a witness, this exception does not apply here. The suggestion that the "doubtful and disputed" language impeaches Jansen is pure speculation and unsupported by the record. Jansen offers no theory how the agreement either impeaches Jansen or shows his bias or prejudice. The evidence is irrelevant and does not impeach Jolcover. The district court did not abuse its discretion by prohibiting cross-examination on this issue.

Jansen next contends there is insufficient evidence to support his convictions for mail and wire fraud. In reviewing a claim for insufficient evidence, we must determine, after viewing the evidence in the light most favorable to the prosecution, whether any rational trier of fact could have found the elements of the crime beyond a reasonable doubt. United States v. Stewart, 770 F.2d 825, 831 (9th Cir. 1985), cert. denied, 474 U.S. 1103 (1986) (citing Jackson v. Virginia, 443 U.S. 307, 319 (1979)).

The elements of mail fraud are: (1) a scheme or artifice to defraud; (2) use of the mails in furtherance of the scheme; and (3) specific intent to deceive or defraud. United States v. Vaughn, 797 F.2d 1485, 1492-93 (9th Cir. 1986). One causes the mails to be used when he "does an act with knowledge that the use of the mails will follow in the ordinary course of business, or where such use can reasonably be foreseen, even though not actually intended." Pereira v. United States, 347 U.S. 1, 8-9 (1954). The words "to defraud" have the "common understanding" of " 'wronging one in his property rights by dishonest methods or schemes,' and 'usually signify the deprivation of something of value by trick, deceit, chicane or overreaching.' " McNally v. United States, 107 S. Ct. 2875, 2880-81 (1987) (quoting Hammerschmidt v. United States, 265 U.S. 182, 188 (1924)).

Similarly, a wire fraud violation consists of (1) the formation of a scheme or artifice to defraud; (2) use of the wires or causing a use of the wires in furtherance of the scheme; and (3) specific intent to deceive or defraud. United States v. Louderman, 576 F.2d 1383, 1387-88 & n. 3 (9th Cir.), cert. denied, 439 U.S. 896 (1978). Viewing the evidence in the light most favorable to the government, we find it was sufficient on all counts.

The two mail fraud counts on which Jansen was convicted alleged that in executing the scheme to defraud, Jansen caused: (1) Continental Bank in Chicago to mail a check return notice to Western Security Bank in Phoenix, and (2) the mailing of his letter in Chicago to the Jolcovers in Phoenix. The evidence showed that Jansen requested a stop payment order on the $23,876.00 check he had written to the Jolcovers. This resulted in Continental Bank returning the check unpaid to Western Security Bank. Jansen had received the $23,876.00 from the Lucases when Western Security received the stop payment notice.

The evidence also showed Jansen mailed a letter to the Jolcovers informing them payment of their check was stopped because they owed additional fees including a 10% commission, $5,327 in travel expenses and $1,500 for a property appraisal fee. Wever testified that until he saw Jansen's letter to the Jolcovers, he was unaware of any additional 10% commission beyond the 12% agreed upon. In Wever's view, the $17,500 "earnest money" constituted the "lions share" of the $18,600 commission leaving only $1,100 due. Wever thought it "was some kind of joke" when he saw the letter demanding an additional 10%. When Wever asked about the 10%, Jansen "indicated to me he thought ... he was entitled to another (10%)."

Jolcover testified there was no discussion or agreement that he was to be responsible for travel expenses incurred. Wever testified that to his knowledge no property appraisal was done.

Any rational trier of fact could conclude on this evidence that the stop payment notice, initiated by Jansen, and his letter, were mailed in furtherance of his scheme to defraud the Jolcovers of the money due them.

As to the wire fraud count, we have no difficulty in concluding that Jansen's long distance telephone call to the Jolcovers telling them they were not going to get their money was in furtherance of the scheme to defraud them. In effect, the call attempted to lull the Jolcovers into believing Jansen had a legitimate reason for the stop payment action.

Jansen's reliance on United States v. Maze, 414 U.S. 395 (1974) is misplaced. In Maze, the defendant fraudulently used a bank card, the sales invoices of which were mailed to the bank holding the card. Maze held only that under those facts the fraudulent scheme had ended before the mailings occurred and that the mailings were not for the purpose of executing a fraudulent scheme.

Our case is not Maze. Jansen's scheme to defraud the Jolcovers did not end before the mailings. " 'If the scheme continues, mailings made after receipt of the money can clearly support conviction.' " United States v. Primrose, 718 F.2d 1484, 1491 (10th Cir. 1983) (quoting United States v. Knight, 607 F.2d 1172, 1175 (5th Cir. 1979)). If the purpose of the mailings is to execute the scheme to defraud by lulling the victims into inaction, mail fraud results. United States v. Sampson, 371 U.S. 75, 81 (1982). The stop payment notification and follow-up letter were in furtherance of Jansen's scheme to defraud the Jolcovers by deceit and overreaching.

Finally, Jansen contends the district court erred by refusing to consider the government's pretrial sentencing position. This argument borders on frivolity. Implicit in our cases is the assumption that the sentencing judge has broad discretion to decide for himself the relevance of sentencing information. See United States v. Morgan, 595 F.2d 1134, 1138 (9th Cir. 1979). Moreover, while Fed. R. Crim. P. 11(e) (6) provides for the general inadmissibility against the defendant of offers to plea and related statements therewith, we conclude the Rule also makes inadmissible the prosecutor's statements during plea negotiations. See United States v. Herman, 544 F.2d 791, 797 n. 9 (5th Cir. 1977); United States v. Verdoorn, 528 F.2d 103, 107 (5th Cir. 1976). Rule 408 of the Federal Rules of Evidence prohibits evidence of offers to compromise. The government's position in sentencing pretrial is irrelevant. The district court did not abuse its discretion in declining to hear that evidence.

The convictions are AFFIRMED.