United States v. Galloway

664 F.2d 161 (1981) United States Court of Appeals for the Seventh Circuit 1981-11-17

criminal; jury verdict of guilty on six mailings (odometer-rollback scheme by a used-car wholesaler), then directed verdict of acquittal by the district court for want of a mailing "for the purpose of executing" the scheme; Government appeals; reversed with directions to reinstate the verdict (one concurrence, one dissent) (result: claimant-won)

Facts

  1. 1 Scheme or artifice to defraud satisfied proved
    The evidence at trial established odometer rollbacks on thirteen automobiles purchased by Wisconsin residents from retail dealers.
  2. 1 Scheme or artifice to defraud satisfied proved
    All these automobiles had been sold to retail dealers by Galloway, primarily through the Greater Chicago Auto Auction, although a few had been sold directly to a dealer whom Galloway had come to know personally.
  3. 1 Scheme or artifice to defraud satisfied proved
    The starting point for analysis of a conviction under the mail fraud statute is determining the scope of the alleged scheme.
  4. 1 Scheme or artifice to defraud satisfied proved
    The evidence at trial indicated that the higher wholesale cost of automobiles resulting from the odometer tampering was reflected in higher prices at the retail level.
  5. 1 Scheme or artifice to defraud satisfied proved
    we find that the jury had sufficient evidence from which it could conclude, as the court below noted, “that the defendant’s scheme was not complete until the cars had been resold to retail customers in Wisconsin.”
  6. 5 Statutory mailing or carrier act satisfied conceded
    These title applications constituted the requisite mailings which supported the mail fraud indictment.
  7. 5 Statutory mailing or carrier act satisfied conceded
    As the district court noted, the evidence supported the finding that Galloway caused the mailings at issue, in the sense that he could reasonably have foreseen their occurrence. This, of course, is the only causation required by the mail fraud statute.
  8. 6 Mailing for execution of the scheme satisfied proved
    In order to finalize this purchase, the Wisconsin dealer would apply for title on behalf of the retail purchaser by mailing the required documents to the State Department of Transportation.
  9. 6 Mailing for execution of the scheme satisfied proved
    Ohrynowicz has been interpreted to hold that where a mailing was a “normal concomitant of a transaction that was essential to the fraudulent scheme, [the mailing] was made for the purpose of executing that scheme.”
  10. 6 Mailing for execution of the scheme satisfied proved
    This essential transaction was not complete until the title documents were mailed to the responsible state agency, which then transferred title from the dealer to the retail purchaser.
  11. 6 Mailing for execution of the scheme satisfied proved
    These mailings were thus wore than “normal concomitants” of an essential transaction, they were an integral part of that transaction. They were essential to executing the scheme to defraud.
  12. 6 Mailing for execution of the scheme satisfied proved
    Thus, Shryock stands for the proposition that where a sale to a retail customer is the final object of a scheme to defraud, mailings of title documents necessary to complete the sale are made “for the purpose of executing” the scheme.
  13. 6 Mailing for execution of the scheme satisfied proved
    Thus, for example, evidence was introduced of odometer rollbacks on automobiles that were not subjects of the indictment, in order to demonstrate that Galloway’s scheme extended beyond individual sales.
  14. 6 Mailing for execution of the scheme satisfied proved
    Any failure in the title application process would have endangered Galloway’s scheme by discouraging the retail dealer from making further purchases of his automobiles.
  15. 6 Mailing for execution of the scheme satisfied proved
    Furthermore, the evidence at trial suggested that those attending the auction frequently knew and spoke with each other.
  16. 6 Mailing for execution of the scheme satisfied proved
    Thus, the title application procedure, from Galloway’s provision of the title documents to their mailing to the state agency, was an essential step in Galloway’s scheme.
  17. 6 Mailing for execution of the scheme satisfied proved
    While it is true, as the trial court noted, that failure to pass title would not necessarily have resulted in discovery of the scheme, it would have endangered its continued success.
  18. 6 Mailing for execution of the scheme satisfied proved
    In this case, therefore, the mailings may fairly be said to have been for the purpose of executing the scheme to defraud.
  19. 6 Mailing for execution of the scheme satisfied proved
    The fact that Galloway received his money before these mailings does not change our conclusion, for “a fraudulent scheme may depend on a mailing even after the defrauders have received the sought-after money or documents.”
  20. 6 Mailing for execution of the scheme satisfied proved
    Galloway admits this fact by emphasizing that nowhere on the title document is an odometer reading required.