United States v. Hasson

333 F.3d 1264 (2003) United States Court of Appeals for the Eleventh Circuit 2003-06-12

criminal; jury conviction of a jeweller on three wire fraud counts, § 371 conspiracy to commit wire fraud, money-laundering and obstruction conspiracies; direct appeal challenging sufficiency (scheme to defraud; foreseeability and purpose of the wires) and the forfeiture and restitution orders; affirmed (result: claimant-won)

Facts

  1. 1 Scheme or artifice to defraud satisfied proved
    That is, not all misrepresentations or omissions constitute a scheme, to defraud; the misrepresentation or omission must be material and it must be one on which a person of ordinary prudence would rely.
  2. 1 Scheme or artifice to defraud satisfied proved
    Puffery, for example, is not part of a scheme to defraud because a person of ordinary prudence would not rely on it; nor would a person of ordinary prudence engaged in an arm’s-length purchase rely on the seller’s representations regarding the market value of the property when the market value can be, and should be, easily verified by consulting other sources.
  3. 1 Scheme or artifice to defraud satisfied proved
    Has-son’s conduct simply cannot be analogized to the mere misrepresentation of accessible market values which, as we held in Brown, could not be reasonably calculated to induce purchase by a person of ordinary prudence.
  4. 1 Scheme or artifice to defraud satisfied proved
    There was also ample testimony regarding the special training and equipment required to evaluate the physical qualities of fíne gems and jewelry from which the jury could reasonably conclude that the misrepresentations were not easily verifiable by the person of ordinary prudence.
  5. 1 Scheme or artifice to defraud satisfied proved
    Furthermore, Hasson prepared false appraisals and arranged for false appraisals prepared by co-conspirator posing as an independent appraiser, creating the impression that his representations were independently verified and making it unlikely that a person of ordinary prudence would invest the time and expense to obtain second or third evaluations of the items purchased.
  6. 1 Scheme or artifice to defraud satisfied proved
    The con included paying co-conspirators to play the roles of the Sultan’s nephew and the nephew’s entourage at a meeting between Johnson and the “nephew” held on Hasson’s private jet, disguised as the nephew’s jet, in late 1995, and at a similar meeting held in a limousine at the Palm Beach airport in late 1996.
  7. 3 Material deception satisfied proved
    A material misrepresentation is one having a natural tendency to influence, or capable of influencing, the decision maker to whom it is addressed.
  8. 3 Material deception satisfied proved
    The record in this case is replete with evidence of material misrepresentations regarding the physical and objective characteristics of the gems and jewelry sold.
  9. 3 Material deception satisfied proved
    The government established that Hasson repeatedly misrepresented the carat weight, color grading, and clarity grading of gems; misrepresented semi-precious gems, synthetic gems, or simulants as natural gems and diamonds; misrepresented stones that had been color- or clarity-treated as natural stones; and misrepresented the history or provenance of items sold.
  10. 3 Material deception satisfied proved
    In sales to Aben and Joan Johnson, Hasson misrepresented the type of gems or stones in 314 items and the history and provenance of at least 80 items and gems.
  11. 5 Transmission or causation by wire, radio, television satisfied proved
    To “cause” the interstate wires to be used, the use of the wires need not be actually intended; it need only be reasonably foreseeable.
  12. 5 Transmission or causation by wire, radio, television satisfied proved
    The interstate wires which were the subject of the substantive counts were three wire transfers made by Aben Johnson, the principal victim of the scheme, from his Michigan bank account to Hasson’s Florida bank account.
  13. 5 Transmission or causation by wire, radio, television satisfied proved
    Mr. and Mrs. Johnson maintained homes in both Florida and Michigan during the time when they purchased gems and jewelry from Hasson and, as was clear from many of the checks written by the Johnsons, maintained out-of-state bank accounts.
  14. 5 Transmission or causation by wire, radio, television satisfied proved
    It was foreseeable that these customers would at some point make use of the interstate wires to transfer large sums of money to complete some of their many expensive purchases.
  15. 7 Wire transmission for execution of scheme satisfied proved
    To violate the wire fraud statute, it is not necessary that the transmitted information include any misrepresentation.
  16. 7 Wire transmission for execution of scheme satisfied proved
    An interstate wire transmission is “for the purpose of executing” the scheme to defraud if it is “incident to an essential part of the scheme” or “a step in the plot.”
  17. 7 Wire transmission for execution of scheme satisfied proved
    The March 6, 1995, wire transfer was for the purchase of two items, one of which was represented to the Johnsons as a diamond ring featuring a flawless 22.11-carat diamond with a color grade of D.
  18. 7 Wire transmission for execution of scheme satisfied proved
    These representations were supported with an appraisal prepared by a co-conspirator and provided by Hasson.
  19. 7 Wire transmission for execution of scheme satisfied proved
    This ring in fact featured an 11.37-carat diamond with a clarity grade VS2 and a color grade L to M.
  20. 7 Wire transmission for execution of scheme satisfied proved
    This wire transfer was an interstate transmission over the wires caused for the purpose of executing the scheme to defraud.
  21. 7 Wire transmission for execution of scheme satisfied proved
    Hasson later induced the Johnsons to repurchase these two pieces, falsely representing that a potential buyer of the Johnsons’ gem and jewelry collection, the Sultan of Brunei, was interested in completing this very substantial purchase only if these items were included in the transaction.
  22. 7 Wire transmission for execution of scheme satisfied proved
    the government introduced no evidence that the physical and objective characteristics of these two pieces of jewelry were misrepresented
  23. 7 Wire transmission for execution of scheme satisfied proved
    Hasson specifically represented that the Sultan wanted these two pieces of jewelry included in the Johnsons’ collection because they had been stolen from the Sultan’s mother.
  24. 7 Wire transmission for execution of scheme satisfied proved
    We readily conclude that the use of the wires to make payment for the two pieces of jewelry whose purchase was fraudulently induced was “for the purpose of executing” the scheme to defraud.