Unpublished Disposition, 898 F.2d 156 (9th Cir. 1988)

MEMORANDUM^* 

William A. Reinke appeals the denial of his motion pursuant to 28 U.S.C. § 2255 attacking the legality of his sentence for two counts of mail fraud in violation of 18 U.S.C. § 1341. We affirm.

* On February 24, 1986, the United States Attorney for the Central District of California filed an information against William Albert Reinke alleging two counts of mail fraud in violation of 18 U.S.C. § 1341. The information alleged that Northrop Corporation hired Reinke in 1984 as an engineering specialist, with duties that included awarding subcontracts for parts for the Air Force Stealth Bomber program. In violation of Northrop's conflict of interest policy, Reinke directed some of Northrop's business to RF Engineering, Inc. ("RF"), a company in which Reinke himself held a controlling interest.

Specifically, the information alleged that RF would purchase items from legitimate suppliers and sell them to Northrop at grossly inflated prices with secret profits. Reinke was charged with defrauding Northrop of, among other things, (1) its right to loyal, faithful and impartial actions and decisions; (2) money, property and other things of value; and (3) its right to be informed of the factors its employees considered when awarding subcontracts.

On March 19, 1986, Reinke pleaded guilty to both counts. Reinke's statement of the factual basis for the plea did not contain an explicit reference to the alleged price gauging. The U.S. Attorney objected to the omission and, upon the court's request, provided an oral explanation of the overpricing scheme alleged in the information. The court then asked Reinke if he agreed that this scheme occurred during the time alleged; Reinke responded, "Yes." On August 11, 1986, the court sentenced Reinke to five years incarceration on count one, five years probation on count two, and $144,000 in restitution.

After his surrender on September 20, 1986, Reinke filed a Rule 35 motion for reduction of his sentence. On July 23, 1987, the court reduced the period of incarceration to two years, leaving intact the probation sentence and the restitution order, despite Reinke's contention that the latter lacked a factual basis. On December 2, 1988, the court held an evidentiary hearing to determine whether Reinke owed less than $144,000. In light of civil litigation pending on the same issue, the court deleted its restitution order.

Reinke initiated this action on May 18, 1987 in Texas where he was incarcerated, by filing a Petition for Writ of Habeas Corpus pursuant to 28 U.S.C. § 2241. The court ruled that the petition was in fact a collateral attack on his sentence pursuant to 28 U.S.C. § 2255 and transferred the case back to the Central District of California, and to the judge who had originally sentenced Reinke. The amended section 2255 petition was filed on July 31, 1987, alleging (1) he was denied the use of classified information for allocution; (2) he was denied effective assistance of counsel due to Government intimidation; (3) the Government made physical threats; (4) the court was guilty of "self-dealing" for publicity; (5) in light of McNally v. United States, 483 U.S. 350 (1986), his sentence lacks a factual basis for the guilty plea, in violation of Federal Rule of Criminal Procedure 11(f). The petition was summarily denied on issues (1) through (4). The petition was also denied on the McNally issue.

II

We review de novo the denial of a Sec. 2255 petition. United States v. Grewal, 825 F.2d 220, 222 (9th Cir. 1987). "For a section 2255 movant to successfully challenge a guilty plea based upon a violation of Rule 11, he must establish that the violation amounted to a jurisdictional or constitutional error or that the violation resulted in a complete miscarriage of justice or in a proceeding inconsistent with the demands of fair procedures." Grewal, 852 F.2d at 222. Mere conclusory allegations do not warrant a hearing. Wagner v. United States, 418 F.2d 618, 621 (9th Cir. 1969). The court may deny a hearing when the allegations fail to state a claim on which relief may be granted, or "are so palpably incredible or patently frivolous as to warrant summary dismissal." United States v. Quan, 789 F.2d 711, 715 (9th Cir.), cert. dismissed, 478 U.S. 1033 (1986).

We find no support in the record for Reinke's first four claims and affirm the judgment of the district court.

III

Reinke's remaining argument is that McNally v. United States, 483 U.S. 350 (1986), requires that the victim suffered financial or property damage instead of just an intangible injury such as breach of fiduciary duty. Id. at 360. He claims that he pleaded guilty only to a failure to disclose a conflict of interest and thus, under McNally, his sentence lacks a factual basis. While we agree with Reinke's characterization of McNally, we disagree that it renders his sentence illegal.

* McNally distinguished concrete and measurable property losses from breach of the more nebulous right to good government, finding that Congress did not intend the latter to be protected by the mail fraud statute. 483 U.S. at 355.¹  Examining the history of the mail fraud statute, the Supreme Court stated, "the words 'to defraud' commonly refer to '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.' " Id. at 358 (quoting Hammerschmidt v. United States, 265 U.S. 182, 188 (1924)).

A year after McNally, the Supreme Court held that the mail fraud statute also extends to those property rights that are intangible. See Carpenter v. United States, 484 U.S. 19 (1987).

We have held that " [i]t is enough after McNally, as before, that the government charge and the jury find either that the victim was actually deprived of money or property or that the defendant intended to defraud the victim of the same. A scheme to defraud, whether successful or not, remains within the purview of section 1341 as long as the jury was required to find an 'intent to obtain money or property from the victim of the deceit.' " United States v. Utz, 886 F.2d 1148, 1151 (9th Cir. 1989).

Thus we agree with Reinke that for those cases to which McNally applies, a person violates section 1341 only if he has deprived, or attempted to deprive, someone of a property interest, be it tangible or intangible. We now consider whether there was a sufficient basis for such a finding before the sentencing judge.

B

Reinke claims there was no factual basis for his sentencing. We review for abuse of discretion. United States v. Spinney, 795 F.2d 1410, 1413 (9th Cir. 1986).

When Reinke entered his guilty plea on March 19, 1986 the court had before it both the Government's information and Reinke's own plea statement. While the information contained a detailed description of Reinke's scheme, his written plea statement omitted it. When the Government expressed concern, the court solicited a brief oral recapitulation of the scheme in open court, in front of both Reinke and his counsel. The court then asked, "You agree with that, Mr. Reinke?" Reinke answered, "Yes. Roughly a year ago, yes."

A sentencing judge may rely on allegations in the information, as well as statements made during the trial and the plea hearing. See Spinney, 795 F.2d at 1413. Rule 11(f) of the Federal Rules of Criminal Procedure does not require a specific method of establishing a factual basis for the sentence as long as the judge is satisfied that there is sufficient evidence to conclude the conduct admitted constitutes the offense charged. United States v. Rivera-Ramirez, 715 F.2d 453, 457 (9th Cir. 1983), cert. denied, 467 U.S. 1215 (1984).

Because the information, guilty plea, and Reinke's own written and oral statements all indicated Reinke was engaged in such a scheme, we find that there was a sufficient factual basis for the sentence.

AFFIRMED.