/f3d/333/1264-01

basis: proved; count: wire transfer of March 6, 1995 ($300,000); subject: count=wire transfer of March 6, 1995 ($300,000)

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.

Evidence kind: fact; polarity: supports; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

This ring in fact featured an 11.37-carat diamond with a clarity grade VS2 and a color grade L to M.

Evidence kind: fact; polarity: supports; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

These representations were supported with an appraisal prepared by a co-conspirator and provided by Hasson.

Evidence kind: fact; polarity: supports; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

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.”

Evidence kind: rule; polarity: not recorded; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

This wire transfer was an interstate transmission over the wires caused for the purpose of executing the scheme to defraud.

Evidence kind: held; polarity: not recorded; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

basis: proved; count: wire transfers of May 14 and July 11, 1996 ($577,500 for a necklace and pin); subject: count=wire transfers of May 14 and July 11, 1996 ($577,500 for a necklace and pin)

the government introduced no evidence that the physical and objective characteristics of these two pieces of jewelry were misrepresented

Evidence kind: fact; polarity: cuts-against; absent flag: 1; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

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.

Evidence kind: fact; polarity: supports; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

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.

Evidence kind: fact; polarity: supports; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

To violate the wire fraud statute, it is not necessary that the transmitted information include any misrepresentation.

Evidence kind: rule; polarity: not recorded; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

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.

Evidence kind: held; polarity: not recorded; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

basis: 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.

Evidence kind: fact; polarity: supports; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

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.

Evidence kind: fact; polarity: supports; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

A material misrepresentation is one having a natural tendency to influence, or capable of influencing, the decision maker to whom it is addressed.

Evidence kind: rule; polarity: not recorded; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

The record in this case is replete with evidence of material misrepresentations regarding the physical and objective characteristics of the gems and jewelry sold.

Evidence kind: held; polarity: not recorded; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

basis: proved; theory: misrepresentations reasonably calculated to deceive a person of ordinary prudence (not mere market-value puffery); subject: theory=misrepresentations reasonably calculated to deceive a person of ordinary prudence (not mere market-value puffery)

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.

Evidence kind: fact; polarity: supports; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

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.

Evidence kind: fact; polarity: supports; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

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.

Evidence kind: fact; polarity: supports; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

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.

Evidence kind: rule; polarity: not recorded; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

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.

Evidence kind: rule; polarity: not recorded; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

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.

Evidence kind: held; polarity: not recorded; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

basis: proved; count: three substantive counts (wire transfers of March 6, 1995; May 14, 1996; July 11, 1996); theory: "causes to be transmitted": foreseeability that the victim would pay by interstate wire; subject: count=three substantive counts (wire transfers of March 6, 1995; May 14, 1996; July 11, 1996); theory="causes to be transmitted": foreseeability that the victim would pay by interstate wire

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.

Evidence kind: fact; polarity: supports; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

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.

Evidence kind: fact; polarity: supports; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

To “cause” the interstate wires to be used, the use of the wires need not be actually intended; it need only be reasonably foreseeable.

Evidence kind: rule; polarity: not recorded; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

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.

Evidence kind: held; polarity: not recorded; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)