United States Court of Appeals for the Ninth Circuit · 1967-11-16
18usc1341: author: Fable · not independently reviewed
Case and law context
Role: applied; posture: criminal; bench-trial conviction on 17 mail fraud counts (mail-order sale of remote Arizona desert lots as "Lake Mead City"), general finding with no special findings; defendant appeals sufficiency of the evidence of a scheme to defraud, plus suppression, grand jury, First Amendment and evidentiary rulings; result: claimant-won; claim:
Uncertainty
None recorded
Misfit
General finding after a bench trial with no special findings: the court ASSUMES the judge found for the Government on every charged statement and affirms because "a sufficient number" were proved misleading. Basis [proved] hides that no specific statement was actually found false by the trier of fact; the per-statement review is the appellate court's own reading of the brochure. Known item 5.
Deception and materiality are one judge-made cluster here (pre-Neder): the opinion decides falsity/misleadingness, treats materiality as mostly uncontested, and folds both into "scheme to defraud". Splitting it into `scheme` and two `materiality` blocks is the annotator's allocation; the law file has no separate id for falsity/deceptiveness or for half-truth/concealment. Known item 3.
Evidentiary rulings closely tied to the scheme element (exclusion of competitors' advertising, of Bureau of Land Management material, and of an industry-ethics opinion letter: custom of the trade is immaterial, the statutory standard governs) are not rulings on an element and get no block; likewise the Fourth Amendment "mail watch" (mail-cover) ruling, the grand-jury quorum ruling, the First Amendment challenge to the indictment, duplicity/bill of particulars, and the ineffective-assistance claim left to a Rule 33 motion.
Count structure is lost: 17 counts each rest on one mailing to a named purchaser but share one scheme (paragraphs of Count I incorporated in all); the opinion never discusses a mailing individually. `count` is used here for categories of representation, which is not what the qualifier means. Known item 8.
Polarity: several sentences mix a disclosed truth with an undisclosed fact ("Although the Fact Sheet warned ... customers were not told ..."); one tag per line. Known item 6.
B · Case × element grid
Top-level elements follow claim order in panels of up to six elements. Case rows repeat across panels. Every recorded block retains its holding and basis; multiple blocks are not merged into a case-level verdict. ✓ satisfied · ✗ not satisfied · ○ not reached · · not addressed. Muted blocks are not counted. Sub-element evidence remains on case and element pages.
Elements 1–6 of 7
| Case | Scheme or artifice to defraud | Traditional money or property as an object | Material deception | Knowing participation with intent to defraud | Statutory mailing or carrier act | Mailing for execution of the scheme |
|---|---|---|---|---|---|---|
| Lustiger v. United States — 386 F.2d 132 (1967) · United States Court of Appeals for the Ninth Circuit · 1967 (18usc1341: author: Fable · not independently reviewed) | ○ not reached · basis not recordedNot counted: applied/merits | ○ not reached · basis not recordedNot counted: applied/merits |
Elements 7–7 of 7
| Case | Separate section 1346 theory; outside property-fraud claim |
|---|---|
| Lustiger v. United States — 386 F.2d 132 (1967) · United States Court of Appeals for the Ninth Circuit · 1967 (18usc1341: author: Fable · not independently reviewed) | · not addressed |
Instances and excluded annotation blocks
| Case | Element | Holding and scope | Pattern | Exact source quotations |
|---|---|---|---|---|
| Lustiger v. United States — 386 F.2d 132 (1967) · United States Court of Appeals for the Ninth Circuit · 1967 — not reached (18usc1341: author: Fable · not independently reviewed) | Mailing for execution of the scheme | not_reached Excluded from merits counts applied / meritsNot contested; the mailings were the sales materials themselves. | Unspecified route | No source quotation recorded for this block. |
| Lustiger v. United States — 386 F.2d 132 (1967) · United States Court of Appeals for the Ninth Circuit · 1967 — satisfied · proved (18usc1341: author: Fable · not independently reviewed) | Knowing participation with intent to defraud | satisfied Counted merits instance applied / merits basis: proved Intent inferred from the number and pattern of misleading statements; money-back and exchange guarantees are evidence of good faith but did not compel acquittal where they were time-limited or conditional and defrauded buyers were unlikely to use them. The price mark-up line is context the court recites, not something it expressly relied on for intent. | inferred-from-pattern-of-deception/refund-and-exchange-policy-offered-as-good-faith | Under the refund policy, if for any reason a customer changed his mind or was not completely satisfied within thirty days, his money was returned without question.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [4390:4553] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.Under the exchange policy, customers who had purchased lots in the ten units within which the company had not installed roads, staked lots, or provided parcel identification markers, could trade for property in the “improved” building area.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [3910:4150] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.Here the exchange policy was conditioned on building within a certain period of time, and the refund policy was limited to thirty days.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [17767:17902] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.Land which cost Lustiger from $33.20 to $125 an acre was in this way sold in one and a quarter acre parcels for from $395 to $495.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [3508:3638] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.As long as a sufficient number of the statements were shown to be knowingly false, deceptive or misleading to permit the trial court to infer that defendant intentionally engaged in a scheme to defraud, the conviction must be affirmed.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [7996:8231] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.While such policies may be evidence of good faith, they do not necessarily negate a finding of bad faith.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [17603:17708] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.Lustiger also argues that his refund and exchange policies negate any finding of fraudulent intent. We disagree.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [17490:17602] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448. |
| Lustiger v. United States — 386 F.2d 132 (1967) · United States Court of Appeals for the Ninth Circuit · 1967 — satisfied · conceded (18usc1341: author: Fable · not independently reviewed) | Statutory mailing or carrier act | satisfied Counted merits instance applied / merits basis: conceded Use of the mails was stipulated; each count charged a mailing of a letter or printed matter to a named purchaser. | postal-service/stipulated-use-of-mails-in-sales-operation | It was stipulated prior to trial that appellant used the mail in connection with his land sales.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [985:1081] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.The company, through Lustiger, informed all customers that mail should be sent to the company at P.O. Box 13349, Phoenix, Arizona.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [2409:2539] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448. |
| Lustiger v. United States — 386 F.2d 132 (1967) · United States Court of Appeals for the Ninth Circuit · 1967 — satisfied · proved (18usc1341: author: Fable · not independently reviewed) | Material deception | satisfied Counted merits instance applied / merits basis: proved; count: representations about access, utilities and land ownership; subject: count=representations about access, utilities and land ownership Same route for the other categories of statements. The mixed utilities sentence is tagged cuts-against for its disclosed half (the Fact Sheet did say utilities were not presently available); its second half supports. Because there were no special findings the court assumes the trial judge found for the Government on every charged statement and holds that a sufficient number proved misleading is enough. | literally-true-advertising-omitting-qualifying-facts | The brochure stated that all Lake Mead City properties “are within the franchised area of Citizen’s Utilities Company, with regard to power and telephone.” This statement is literally true.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [12458:12647] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.Although the “Fact Sheet” stated that utilities were not presently available, Lustiger failed to disclose that the nearest existing electric power lines and telephone lines are approximately twenty-one miles from the nearest, and thirty-eight miles from the farthest of the Lake Mead City subdivision units.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [12801:13108] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.Customers were not informed that the company owned only the odd-numbered sections, the even-numbered sections belonging to the federal government for grazing, mining and recreational purposes.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [14949:15141] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.Finally, customers were not told that large washes, rocky hills, and steep cliffs separated many of the subdivision parcels, making reasonable travel between them in the future highly unlikely.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [15367:15560] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.The evidence is overwhelming that Lustiger’s advertising materials were in some respects false and, apart from falsity were, when considered as a whole, fraudulently deceptive and misleading, exhibiting an intent and purpose to defraud.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [15692:15928] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448. |
| Lustiger v. United States — 386 F.2d 132 (1967) · United States Court of Appeals for the Ninth Circuit · 1967 — satisfied · proved (18usc1341: author: Fable · not independently reviewed) | Material deception | satisfied Counted merits instance applied / merits basis: proved; count: representations about water (recreational and domestic); subject: count=representations about water (recreational and domestic) The block records the deception limb (false or fraudulent pretences): literally true statements plus photographs and maps that mislead as a whole. Materiality in the strict sense was not contested for the water representations ("nor does he question the materiality of the facts presented"); what the court decided is that they were proved misleading. Measured against a person of average intelligence and experience, with a footnote that the naive are protected too. Pre-Neder; materiality is treated as part of the scheme, not a separate element. | literally-true-advertising-omitting-qualifying-facts | Another picture shows a large metal water tank lying horizontally alongside a windmill, with the printed declaration: “IMPORTANT! Plenty of Water.”Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [8837:8984] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.It is true that, measured by a straight line, Lake Mead is only five miles from the boundary of Lake Mead City.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [9892:10003] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.However, Lustiger did not reveal that by existing roads Lake Mead is fifteen miles from the nearest and forty miles from the farthest Lake Mead City unit.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [10004:10158] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.Undisclosed to the prospective purchaser, however, was the fact that none of the pictured bodies of water were on land owned or optioned by Lustiger’s company.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [10475:10634] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.Lustiger failed to disclose that the only source of water on the property owned by the company and available to purchasers during the period charged in the indictment was the Clearwater Well, located in the far northwest corner of the Lake Mead City units, a distance of twenty-eight miles from some subdivision units.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [11177:11495] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.Moreover, deceitful statements of half truths or the concealment of material facts is actual fraud violative of the mail fraud statute.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [16309:16444] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.Our examination of Lustiger’s advertising materials reveals that the statements, photographs and maps, unaccompanied by true statements concerning the lack of available water, could reasonably have led a person of average intelligence and experience to believe that all parcels offered for sale had reasonable access to a water supply.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [9405:9740] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.While the statements in the advertising materials may not have been literally false, taken as a whole they were fraudulently misleading and deceptive.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [9741:9891] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448. |
| Lustiger v. United States — 386 F.2d 132 (1967) · United States Court of Appeals for the Ninth Circuit · 1967 — not reached (18usc1341: author: Fable · not independently reviewed) | Traditional money or property as an object | not_reached Excluded from merits counts applied / meritsPurchase money from lot buyers; not discussed as an issue. | Unspecified route | No source quotation recorded for this block. |
| Lustiger v. United States — 386 F.2d 132 (1967) · United States Court of Appeals for the Ninth Circuit · 1967 — satisfied · proved (18usc1341: author: Fable · not independently reviewed) | Scheme or artifice to defraud | satisfied Counted merits instance applied / merits basis: proved Sufficiency upheld after a bench trial. The scheme is the nationwide advertising programme taken as a whole; "seller's puffing" defence rejected because the deception was substantial and buyers bought sight unseen. Industry custom and competitors' advertising held immaterial to whether there was a scheme (the statute's standard governs) - an evidentiary ruling, see misfit. | mail-order-land-sale-brochure-portraying-nonexistent-planned-community | Lustiger caused the company to advertise its property in newspapers and other publications throughout the country. Those who answered were sent an “Investor’s Kit,” consisting of a thirty-two page color brochure, a “Fact Sheet,” and a land reservation form.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [2934:3191] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.In fact, no city or community of residents, or building improvements of any kind, were in existence up to March, 1963, except for a small field office used by the company and a temporary dwelling occupied by a guide and caretaker.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [14033:14263] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.There was no plan to construct or provide housing or shopping facilities, or provide the utilities necessary to the development of a planned city or community.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [14358:14517] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.Moreover, here prospective buyers were expected to rely almost entirely on the advertising materials in making their purchase. Only a few buyers saw the property before signing the purchase contract.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [17170:17369] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.Although the accompanying “Fact Sheet” warned that no streets were presently available, prospective customers were not told that the terrain in many of the units made actual construction of a road physically impracticable or unreasonably expensive.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [12015:12263] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.If a scheme is devised with the intent to defraud, and the mails are used in executing the scheme, the fact that there is no misrepresentation of a single existing fact is immaterial. It is only necessary to prove that it is a scheme reasonably calculated to deceive, and that the mail service of the United States was used and intended to be used in the execution of the scheme.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [15929:16308] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.While it is true that exaggeration within reasonable bounds under the circumstances will not support a finding of a scheme to defraud, a substantial deception, as evidenced here, is sufficient.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [16976:17169] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.The trial court was warranted in finding that the use of the words “Lake Mead City” in the subdivision name, taken in conjunction with the phrases quoted above were intended to mislead prospective customers into believing that a planned city or community had already been started and was rapidly growing.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [13728:14032] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448.We conclude that the evidence is sufficient to support a finding that Lustiger intentionally engaged in a scheme to defraud.Source: docroot/ir/caselaw/f2d_386.jsonl#/f2d/386/0132-01; Unicode character offsets [18203:18327] (end exclusive); SHA-256 984d9591aa1d590044854cc6ba2d3627f236458be86a3fceb9b89b65a6836448. |