Unpublished Disposition, 900 F.2d 263 (9th Cir. 1990)

MEMORANDUM

Bagley was convicted in district court of conspiracy to commit mail fraud, equity skimming, and willful failure to file income tax returns in violation of 18 U.S.C. § 371; mail fraud in violation of 18 U.S.C. § 1341; equity skimming in violation of 12 U.S.C. § 1709-2; and willful failure to file income tax returns in violation of 26 U.S.C. § 7203. The district court had jurisdiction pursuant to 18 U.S.C. § 3231. We have jurisdiction over this timely appeal pursuant to 28 U.S.C. § 1291. We affirm.

Bagley asserts that the evidence was insufficient to convict her in that it failed to show (1) her knowledge of the fraudulent nature of the business for the conspiracy conviction; (2) her intent to defraud for the mail fraud conviction; (3) her willfully engaging with intent to defraud in the equity skimming conviction; and (4) the willful failure to file in the tax return conviction. We review the sufficiency of the evidence to determine "whether a reasonable jury, after viewing the evidence in the light most favorable to the government, could have found the defendants guilty beyond a reasonable doubt of each essential element of the crime charged." United States v. Hernandez, 876 F.2d 774, 777 (9th Cir.) (Hernandez), cert. denied, 110 S. Ct. 179 (1989), citing United States v. Douglas, 780 F.2d 1472, 1471 (9th Cir. 1986). Circumstantial evidence and inferences drawn from it may be sufficient to sustain a conviction. Hernandez, 876 F.2d at 777.

* "To prove a conspiracy, the government must show (1) an agreement (2) to engage in criminal activity and (3) one or more overt acts in furtherance of the conspiracy." Id. "The prosecution need not show the agreement to have been explicit. An implicit agreement may be inferred from the facts and circumstances of the case." Id. "The coordinated actions of codefendants are strong circumstantial evidence of an agreement." Id. at 778.

There is more than enough evidence to support Bagley's conviction. Bagley ran the business office of Metro Properties Investment Corporation (Metro), keeping track of the properties and supervising the secretaries and the office correspondence. She also was directly involved with the rental properties, receiving the rental income and taking care of the banking and financial affairs of Metro. It was these receipts that were diverted, illegally, from the mortgage payments. Bagley operated the computer and the property acquisition chart through which property acquisitions, defaults, and foreclosures were noted. A rational jury could conclude from these facts and circumstances that Bagley was involved in the conspiracy.

II

"Under 18 U.S.C. § 1341, the essential elements of mail fraud are: (1) a scheme to defraud, and (2) a knowing use of the mail to execute the scheme." United States v. Beecroft, 608 F.2d 753, 757 (9th Cir. 1979). "The government satisfies the requirement of proof of specific intent under section 1341 if it proves the existence of a scheme which was 'reasonably calculated to deceive persons of ordinary providence and comprehension,' and this intention is shown by examining the scheme itself." United States v. Green, 745 F.2d 1205, 1207 (9th Cir. 1984), cert. denied, 474 U.S. 925 (1985). A party to a continuing conspiracy may be responsible for substantive offenses committed by a co-conspirator in furtherance of the conspiracy, even though he or she does not participate in the substantive offenses or have knowledge of them. See Pinkerton v. United States, 328 U.S. 640, 645-48 (1946).

The evidence supports Bagley's conviction. Bagley mailed letters to homeowners and mortgage companies. Bagley was also involved in the collection of rent from tenants. Monies collected through the mails from the rental receipts were deposited in Metro's bank account and then paid over to Bagley and her company, Susan's Secretarial Services. Bagley's intent to defraud is evidenced by the nature of her involvement in the scheme. The evidence was sufficient for a reasonable jury to determine that Bagley was aware of and involved in the scheme, and that she used the mail to execute the scheme.

III

The essential elements of equity skimming are:

(1) Willfully engaging, with intent to defraud, in a pattern or practice of--

(a) purchasing one to four family dwellings which are subject to a loan in default at time of purchase or in default within one year subsequent to the purchase and the loan is secured by a mortgage or deed of trust insured or held by the Secretary of Housing and Urban Development or guaranteed by the Veterans Administration,

(b) failing to make payments under the mortgage or deed of trust as the payments become due, and

(c) applying or authorizing the application of rents from such dwellings for his own use.

12 U.S.C. § 1709-2.

Evidence of Bagley's involvement in running the Metro office indicates that she participated actively in the operation. Susan and John Bagley both operated Metro which purchased distressed properties. The evidence shows Bagley helped collect rents and deposited them in Metro's bank account. The evidence indicates that monies from Metro's bank accounts were paid to Bagley and her company. These rental deposits were to have been applied to the outstanding mortgages. The jury could properly conclude from the fact that Bagley participated in purchase of properties, collection of rents, depositing of monies, and diversion of funds indicates that she was involved in equity skimming.

Bagley's receipt of rental monies from an account she controlled is evidence of her willful actions. From the fact that Bagley ran the office, a reasonable jury could find that she knew payments were supposed to be made on the mortgages. From this knowledge, along with the control of the rental monies, a jury could reasonably find the necessary intent. Thus, a reasonable jury could find that Bagley committed equity skimming.

IV

The essential elements of willful failure to file a return are: (1) a financial requirement to file an income tax return at the time required by law, (2) a willful failure to file such a return. United States v. Buras, 633 F.2d 1356, 1358 (9th Cir. 1980). Willfulness does not require proof of a bad or evil motive in not filing, but only the awareness of an obligation to file and an intentional failure to act. United States v. Bishop, 412 U.S. 346, 360 (1973).

The evidence indicates that Bagley's income level warranted the filing of a return for the year in question. The evidence shows that Bagley had filed tax returns in other years, thus indicating a knowledge of the need to file. A reasonable jury could find, based on this evidence, that Bagley knew she had to file a 1985 return and that her failure to file was willful.

AFFIRMED.

Note: This disposition is not appropriate for publication and may not be cited to or by the Courts of this Circuit except as provided by Ninth Circuit Rule 36-3.