In U.S. v. Lee, No. 04-12485 (Oct. 5, 2005), the Court (Carnes, Pryor, Forrester b.d.) affirmed two defendants’ mail fraud convictions, but vacated one sentence on a double counting issue as to which the parties agreed.. The scheme involved writing checks on closed bank accounts.
The Court rejected the defendants’ challenge to the sufficiency of the evidence, finding that the letters the defendants wrote to their banks about their bank accounts were designed to further their scheme, that the letter written about foreclosure of their property were also designed to "obfuscate." The Court rejected the argument that the mailings were litigation documents which could not give rise to criminal liability. The Court distinguished U.S. v. Pendergraft, 297 F.3d 1198 (11th Cir. 2002), pointing out that the documents at issue did not involve court filings, but third-parties, whom they were trying to influence as part of their scheme. Moreover, Pendergraft did not involve documents which evidenced an "intent to deceive." The Court recognized "the real public policy concerns in allowing litigation documents to form the basis for a mail fraud claim," but said "it cannot countenance mailng false claims clothed in legalese to lenders, with the intent of perpetrating or perpetuating a fraud, even where litigation is ongoing."
Turning to the Booker sentencing issues, the Court found no error as to one defendant where the district court stated on the record that it would have given the defendant the same sentence whether the Guidelines were mandatory or advisory. As to the other defendant, the Court found no error in denying her a continuance so that she could be sentenced post-Blakely, because counsel ultimately informed the court that the defendant was prepared to go forward on the appointed sentencing date.
The Court rejected a challenge to the loss amount calculation, finding the court’s estimate of the loss was supported by the evidence. The Court also rejected defendant’s argument that the sentence should have reduced because the scheme was interrupted when the victims refused to honor the bad checks. The Court noted that an interruption beyond the control of the defendant is not a basis for a sentence reduction.
The Court rejected the argument that the sentence should not have been enhanced based on the existence of ten or more victims because some of these victims were able to offset their losses. The Court concluded that despite the offset, the victims were still considered victims for Guidelines purposes.
Finally, the Court rejected a hearsay challenge to the admission of a bank letter warning the defendants of "potential bank fraud," finding that the letter was not admitted for its truth, but for the purpose of showing that the banks were aware that the transactions were wrongful and so informed the defendants. The Court also rejected the challenge to the testimony of a lawyer that the defendants’ actions were illegal, pointing out that this statement was elicited on redirect, in response to cross-examination which opened the door.
